Introduction
¶ 1 This is a hearing under section 161(1) of the Act against Malcolm Stevenson. The notice of hearing, dated February 21, 2002, alleged that Stevenson, as an insider of a public company, failed to file trade reports as required under section 87 of the Act. 

¶ 2 The facts are not in dispute and are set out in an agreed statement of facts. This hearing is to determine the appropriate sanction. We must decide what sanction should be made in the public interest based on the following agreed facts.

¶ 3 At various times between May 1996 to December 1998, the relevant period, Stevenson was the president, secretary-treasurer and chief financial officer of Diversified Investment Strategies Inc. Diversified was a reporting issuer under the Act and its securities traded on the Alberta Stock Exchange. 

¶ 4 While Stevenson was an insider, he acquired 566,392 options and acquired or disposed of approximately 935,600 shares of Diversified in 329 transactions. Stevenson filed insider reports in 17 of the 25 months he was required to file, however most of the reports were filed late and most contained incomplete or inaccurate information. There was significant trading (over 7 million shares) in Diversified during the 25-month period. Stevenson’s trading represented approximately 13% of that trading and was over $1.7 million in value. In each month of the 25-month period there was at least a 20% fluctuation in the prices at which the shares traded.

¶ 5 On January 20, 1999 Commission staff issued a cease trade order against Stevenson for his failure to file insider reports. Stevenson then filed his outstanding and corrected insider reports and paid $850 in late filing fees as required under section 22 of the Securities Regulation, BC Reg. 196/97. The cease trade order was revoked on February 9, 1999. Stevenson resigned from Diversified in January 2000 and has not acted as a director or officer of any reporting issuer since then.

¶ 6 Stevenson agreed he failed to file insider reports contrary to section 87 of the Act and section 155 of the Securities Rules, BC Reg. 194/97.

¶ 7 On the basis of these facts, Commission staff is seeking orders that Stevenson:

1. be prohibited from using the trading exemptions under the Act for four years, except where he is trading securities for his own account;

2. pay an $8,000 administrative penalty;

3. be prohibited from acting as a director or officer of any issuer ending on the later of four years from the date of the order, the date he pays the $8,000 penalty or the date he completes a course of study satisfactory to the Executive Director concerning the duties and responsibilities of directors and officers of public companies.

¶ 8 Staff emphasized that they were not seeking an order for costs.

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