News Release

Vancouver -- A B.C. man with a history of securities violations must appear before a British Columbia Securities Commission hearing to face allegations of securities fraud in a share-purchasing scheme and for acting as an investment adviser without being registered.

Between March and August 1996, Michael Lee Mitton and George Ronald Stephens bought shares either directly or through nominees of various companies, shares that they did not pay for and for which they had no intention of paying.

Mitton, who was criminally convicted in December 2000 for six counts of fraud related to an investment swindle, is alleged to have directed the share purchases through trading accounts at brokerage houses in B.C., Alberta, United States and the Isle of Man.

BCSC staff allege these trading accounts were in a debit position with the brokerage firms at which they operated for much of their existence. Very little money was ever deposited in these accounts. Periodically, Mitton, Stephens or a nominee issued cheques to the firms to create the appearance that some of the debits in the accounts were being covered. These cheques were drawn on accounts with insufficient funds or accounts that had not been properly opened.

All together, the brokerage houses suffered losses totalling more than $2.2-million in the share-purchasing scheme, the commission says in its notice of hearing.

BCSC staff allege that Mitton and Stephens violated the Securities Act by perpetrating a fraud on British Columbians through the scheme. Commission staff also allege that Mitton acted as an adviser without registration and without an exemption from registration.

Mitton is also alleged to have breached a commission order issued in 1988 barring him from the securities markets for 20 years stemming from his admission to insider trading, market manipulation and failure to meet continuous disclosure filing requirements.

Also named in the hearing notice made public today is Bradley Nixon Scharfe, a registered investment dealer in B.C. since December 1987. Scharfe allegedly failed to establish the identity and reputation of his clients and failed to fulfil his gatekeeper duties.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities and exchange contracts within the province. Copies of the notices of hearing can be viewed in the documents database of the commission’s website www.bcsc.bc.ca or by contacting Andrew Poon, Media Relations, 604-899-6880.