Decisions

Elmer Patrick Ayers [Decision]

BCSECCOM #:
---
Document Type:
Decision
Published Date:
1995-11-17
Effective Date:
1995-11-10
Details:

COR#95/173
(Re) Ayers
IN THE MATTER OF The Securities Act, S.B.C. 1985, c. 83
AND IN THE MATTER Of Elmer Patrick Ayers
Decision
A.R. Wanstall, S.M. Davison, E.L. Lien
Heard:  September 7, 1995
Decision: November 10, 1995

Appearing:

Steve Zolnay, for Commission staff.


DECISION OF THE COMMISSION

WHEREAS pursuant to a notice of hearing dated August 1, 1995, a hearing was held under section 144 of the Securities Act, S.B.C. 1985, c. 83 on September 7, 1995;

AND WHEREAS at the hearing evidence was produced upon which we make the following findings of fact:

1.
on September 27, 1991, Elmer Patrick Ayers consented to an order of the Superintendent of Brokers made under section 144(1) of the Securities Act, S.B.C. 1985, c. 83 that the exemptions in sections 30 to 32 of the Act do not apply to Ayers for a period of 10 years ending September 27, 2001;
2.
in an agreed statement of facts entered into on September 27, 1991, Ayers agreed that he had contravened sections 20 and 42 of the Act in connection with the sale of securities requiring registration and requiring delivery of a prospectus to the purchasers, that the purchasers had lost over $1.2 million and that Ayers had pleaded guilty in the Provincial Court of British Columbia to an offence under section 138(1)(c) of the Act for contravening sections 20 and 42 of the Act and had been fined $50,000;
3.
in 1993, Ayers incorporated Liberty Ostrich Farms Inc. under the Company Act of British Columbia and, during the period through August 1993, was the sole director and only common shareholder of Liberty;
4.
within a year and an half of the 1991 order, in April and August of 1993, when Ayers was not registered under section 20 of the Act, Ayers approached Clovis Beaudry in Kelowna, British Columbia, and solicited funds for Liberty, particulars of which are as follows: in a meeting with Ayers on April 13, 1993, Beaudry signed a subscription for 20,000 preferred shares of Liberty and delivered the subscription price of $2,500 to Ayers and similarly, in a meeting with Ayers on August 16, 1993, Beaudry signed a subscription for 5,000 preferred shares of Liberty and delivered the subscription price of $5,000 to Ayers;
5.
Ayers deposited the subscription prices in accounts of Liberty;
6.
Beaudry lost $7,500;
7.
on April 19, 1995, Ayers was convicted in the Provincial Court of British Columbia of two counts of trading in the securities of Liberty in contravention of the 1991 order, contrary to section 138(1)(d) of the Act;
AND WHEREAS the relevant sections of the Act are as follows:

-
section 20(1) states that no person shall trade in a security unless the person is registered;
-
section 1(1) defines trade to include any act, ... solicitation, conduct or negotiation directly or indirectly in the furtherance of a disposition of a security for valuable consideration;
-
section 1(1) defines security to include under (c) a document evidencing a subscription;
-
section 144(1) authorized the Superintendent to issue the 1991 order, which specified that the exemptions in sections 30 to 32 were not available to AYERS for a period of time that included the period from April to August of 1993;
-    sections 30 to 32 provide all the exemptions from the
      requirement to register under section 20(1) found in the
      Act.


AND WHEREAS we find that Ayers, during a time when Ayers was not registered under section 20 of the Act and when no exemptions from the requirement to register was available to him, on two occasions, traded in securities to Beaudry by acts, solicitations, conduct and negotiations in furtherance of a disposition for preferred shares of Liberty for valuable consideration of $7,500 and thereby contravened section 20 of the Act and the 1991 order;

AND WHEREAS we consider it to be in the public interest;

WE ORDER:

1.
under section 144(1)(c) of the Act, that the exemptions described in sections 30 to 32, 55, 58, 80 and 81 of the Act do not apply to Ayers for a further period of 10 years from the expiry date of the 1991 order, to September 27, 2011;
2.
under section 144(1)(d) of the Act, that Ayers be prohibited from becoming or acting as a director or officer of any issuer for a period that expires on September 27, 2011;
3.
under section 144.1 of the Act, that Ayers pay an administrative penalty of $7,500;
4.
under section 154.2 of the Act, that Ayers pay
-
$1,000 for the administrative costs of the hearing; and
-
costs of or related to the hearing incurred by the Superintendent to be determined following further submissions from the parties.
A.R. WANSTALL, Member
S.M. DAVISON, Member
E.L. Lien, Member