News Release

Released: 06/07/01 Contact: Andrew Poon
NR 01-24 (604) 899-6880 or
(BC only) 1-800-373-6393


Vancouver – The B.C. Securities Commission has banned two First Marathon Securities Ltd. stockbrokers from the B.C. securities markets for a year and ordered them to pay the maximum penalty of $100,000 each following a lengthy hearing into Cartaway Resources Corp.

Robert Arthur Hartvikson and Blayne Barry Johnson are also barred from serving as directors and officers of any reporting issuer for one year. As well, the pair must successfully complete a course on the duties and responsibilities of directors and officers.

First Marathon, its Vancouver branch manager and three other members of the control group previously entered into settlements with the Commission.

In considering what orders were appropriate in the public interest, the Commission considered:
Ø The seriousness of the conduct and the resulting damage done to the integrity of the capital markets
Ø The lack of appropriate supervision by First Marathon
Ø The settlements with the other brokers
Ø The $5.1 million in trading profits made by Hartvikson and Johnson
Ø The lack of previous regulatory problems
Ø The surrender of their broker registration in 1996
Ø Their reliance on a legal opinion in distributing Cartaway shares to other employees
Ø Their regret for any errors in judgement that led to the findings against them.

“In the circumstances, we are not convinced that a lengthy ban against their participation in the capital markets of British Columbia is necessary to protect the public interest,” said the panel.

The panel also said it would rule on the Commission staff’s request for costs after being given more details.

Last October, the panel found Hartvikson and Johnson were in conflicts of interests by being part of a Cartaway control group consisting of First Marathon brokers while First Marathon acted as agent in two of Cartaway’s financings. That control group acquired a substantial number of shares of Cartaway before it was made public that Cartaway was going into Voisey’s Bay, Newfoundland. The group made millions of dollars before the stock price collapsed. The panel found that:
Ø The control group acquired Cartaway shares in the first financing at a price that did not reflect the material changes in Cartaway
Ø Hartvikson and Johnson sold Cartaway shares to their clients in the second financing using an offering memorandum that they knew did not disclose all the material facts, and
Ø Hartvikson and Johnson deceived and mislead First Marathon and its clients (including Cartaway), the Alberta Stock Exchange and Commission staff.

“This kind of conduct seriously undermines public confidence in the fairness of markets,” the panel said.

"The issue here is simply whether Hartvikson and Johnson, as registrants and employees of First Marathon, acted fairly, honestly and in the best interests of the clients of First Marathon, including Cartaway.

"We find they did not. As a consequence, we find that they breached their duties as registrants and employees of First Marathon. By favouring their own interests to the prejudice of those to whom they owed a duty to act fairly, honestly and in their best interests, Hartvikson and Johnson acted contrary to the public interest."

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 original finding and this decision can be viewed in the documents database of the Commission’s website www.bcsc.bc.ca or by contacting Media Relations Officer Andrew Poon at 899-6880.