NIN 88/11 - The Effect of Criminal and Civil Litigation on Trading Rights and Registration [NIN - Rescinded]

Published Date:	1988-06-10
Effective Date:	1988-06-06

Over the past several months the Securities Commission's staff have been reviewing the position of this office concerning situations where criminal charges are laid that relate, in some way, to trading in securities. While each case will be dealt with on an individual basis after a complete assessment of all available information, the following represents the general position of this office regarding such circumstances:

1. Where a registrant is charged with a criminal offence that points to an abuse of that individual's registration, an order pursuant to Section 26(2) of the British Columbia Securities Act (the "Act") will be issued suspending that registration until the holding of a hearing at which time the registrants continued registration will be determined. In addition, in most circumstances, an order will be issued pursuant to 145(2) of the Act removing trading rights. The order will remain outstanding pending the completion of a hearing pursuant to Section 145(l) of the Act.

2. Where an individual, other than a registrant, is charged with a criminal offence that relates in some way to trading in securities, in most circumstances an order will be issued pursuant to Section 145(2) of the Act removing trading rights. The order will remain outstanding until a hearing is held pursuant to Section 145(l) of the Act.

3. Where a registrant or individual is named as a defendant in a civil action alleging serious improprieties in relation to trading in securities, an investigation may be expected and, if judgment is granted in favour of the plaintiff, orders pursuant to Section 26(2) and Section 145(2) of the Act, as the case may be, will usually be issued. The orders will remain outstanding pending hearings pursuant to Section 26(l) and Section 145(l) of the Act.

The above policy represents an attempt to balance the rights of individuals who are the subject of criminal or civil litigation with the public interest of residents of this Province and persons and companies active on the Vancouver Stock Exchange.


DATED at Vancouver, British Columbia, this 6th day of June, 1988.