Settlements

JAMES J. DIBENEDETTO et. al. [Agreed Stmt.]

BCSECCOM #:
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Document Type:
Agreed Stmt.
Published Date:
2000-04-07
Effective Date:
2000-03-31
Details:


IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418

AND

IN THE MATTER OF JAMES J. DIBENEDETTO,
KEVIN W. CHRISTIAN AND MARY N. POWLEY

Agreed Statement of Facts and Undertaking


1. The following agreement has been reached between James J. DiBenedetto (“DiBenedetto”), Kevin W. Christian (“Christian”) and Mary N. Powley (“Powley”) (collectively, the “Respondents”), and the Executive Director.

2. As the basis for the undertakings referred to in paragraphs 4, 5 and 6 of this agreement, the Respondents acknowledge the following facts as correct:
      2.1 Greenwood Environmental Inc. (“Greenwood”) is a reporting issuer incorporated under the Canada Business Corporations Act, and is an exchange issuer, as the term is defined in section 1(1) of the Securities Act, R.S.B.C. 1996 (the “Act”);

      2.2 on or about May 28, 1998, Greenwood submitted its annual comparative financial statements as of December 31, 1997 and 1996 (the “Financial Statements”), the auditor’s report on the Financial Statements (the “Auditor’s Report”), dated April 18, 1998, and the accompanying Form 61, Quarterly Report, through SEDAR, to be filed with the British Columbia Securities Commission (the “Commission”);

      2.3 the Auditor’s Report was purportedly issued by Schwartz Levitsky Feldman LLP, Chartered Accountants (the “Auditor”), who was the auditor of record for Greenwood at all material times, and bears the signature of the Auditor;

      2.4 DiBenedetto was President, Chief Executive Officer and a director of Greenwood at all material times, and had given instructions to Christian and Powley in all matters relating to the preparation, filing and distribution of the Financial Statements and the Auditor’s Report;

      2.5 Christian was a director of Greenwood at all material times, and had acted on DiBenedetto’s instructions, relayed to him through Powley, to prepare the Financial Statements and the Auditor’s Report for filing with the Commission and the Vancouver Stock Exchange, through SEDAR;

      2.6 Powley was corporate secretary of Greenwood at all material times, and had acted on DiBenedetto’s instructions to distribute the Financial Statements and the Auditor’s Report to Greenwood shareholders;

      2.7 DiBenedetto and Christian were members of the audit committee of Greenwood, as appointed under section 187 of the Company Act, R.S.B.C. 1996, c. 62, at all material times, and were the signatories to the Financial Statements on behalf of the Board of Directors of Greenwood;

      2.8 on or about June 30, 1999, the Auditor advised the staff of the Commission, and subsequently stated in a sworn affidavit, that the Auditor’s Report that had been filed with the Commission was not signed by the Auditor, nor did the Auditor authorize any person to sign its name on the Auditor’s Report;

      2.9 Greenwood acknowledged that, at the time the Financial Statements and the Auditor’s Report were filed with the Commission, the audit on the Financial Statements was not completed, and a signed auditor’s report was never issued by the Auditor, due to Greenwood’s inability to pay the outstanding audit fees owed to the Auditor;

      2.10 the Respondents had caused Greenwood to contravene section 3(4) of the Securities Rules, R.B.C. Reg. 194/97 (the “Rules”), which prescribes that the Financial Statements, being a required filing under section 145 of the Rules, must include an auditor’s report on them prepared by a person that is qualified to make the auditor’s report;

      2.11 by causing Greenwood to fail to send to each of its shareholders an auditor’s report on the Financial Statements, prepared in accordance with the requirements of section 3(4) of the Rules, which is an integral part of the Financial Statements, and, by causing Greenwood to fail to file a valid auditor’s report with the Commission, the Respondents had caused Greenwood to contravene section 149(a) of the Rules, and section 155(1)(b)(i) of the Act;

      2.12 the Respondents represented to the staff of the Commission that they had either failed to exercise due diligence or were ignorant about their fiduciary duties as directors, senior officers and/or members of the audit committee of Greenwood, in relation to the filing and distribution of the Financial Statements and the Auditor’s Report;

      2.13 the current Board of Directors of Greenwood has represented to the staff of the Commission that the delinquencies in Greenwood’s filing of the Financial Statements and the Auditor’s Report, resulting from the Respondents’ negligence in exercising their fiduciary duties, have been rectified;

      2.14 the amended version of the Financial Statements (the “Amended Financial Statements”), which were filed with the Commission, through SEDAR, on October 12, 1999, contained an auditor’s report that was signed off by the Auditor in the normal course; and

      2.15 the financial figures that were reported in the Amended Financial Statements were identical to those reported in the Financial Statements that were previously filed on May 28, 1999.

3. DiBenedetto has been (and still is) a bankrupt under the Bankruptcy and Insolvency Act (Canada), since he filed an assignment in bankruptcy on June 30, 1999, and, therefore, is unable to pay any penalty or investigation costs that would otherwise have been imposed on him.

4. DiBenedetto undertakes:

      4.1 to comply fully with the Act, the Rules or any applicable regulations, policies and guidelines;

      4.2 not to become or act as a director or officer of any reporting issuer for a period of five year, from the date of this agreement; and

      4.3 to take and complete successfully the securities program offered by Simon Fraser University, or a comparable course of study acceptable to the Executive Director, regarding public companies, and the duties and responsibilities of directors and officers of public companies, prior to acting as a director or officer of any reporting issuer in British Columbia.
5. Christian undertakes:

      5.1 to comply fully with the Act, the Rules or any applicable regulations, policies and guidelines;

      5.2 not to become or act as a director or officer of any reporting issuer for a period of one year, from the date of this agreement;

      5.3 to take and complete successfully the securities program offered by Simon Fraser University, or a comparable course of study acceptable to the Executive Director, regarding public companies, and the duties and responsibilities of directors and officers of public companies, prior to acting as a director or officer of any reporting issuer in British Columbia; and

      5.4 to pay $2,000.00 to the Commission at the time of entering into this settlement, $500.00 of which represents the costs of the investigation, and the remainder a penalty, which will be paid into the Industry Education Fund.

6. Powley undertakes:
      6.1 to comply fully with the Act, the Rules or any applicable regulations, policies and guidelines;

      6.2 not to become or act as a director or officer of any reporting issuer for a period of one year, from the date of this agreement;

      6.3 to take and complete successfully the securities program offered by Simon Fraser University, or a comparable course of study acceptable to the Executive Director, regarding public companies, and the duties and responsibilities of directors and officers of public companies, prior to acting as a director or officer of any reporting issuer in British Columbia; and

      6.4 to pay $1,000.00 to the Commission at the time of entering into this settlement, $500.00 of which represents the costs of the investigation, and the remainder a penalty, which will be paid into the Industry Education Fund.
7. Each of the Respondents waives any right he or she may have, under the Act or otherwise, to a hearing, hearing and review, judicial review or appeal related to, in connection with or incidental to this agreement.

DATED at Fonthill, Ontario, on March 16, 2000.


“M. Powley” )
Witness Signature )
)
Mary Powley )
Witness Name (Please Print) )
          ) “James DiBenedetto”
2 Kevin Drive, Fonthill, Ont. ) James J. DiBenedetto
Address )
)
Office Clerk )
Occupation )

DATED at Niagara Falls, Ontario, on March 17, 2000.


“Anna Luciana” )
Witness Signature )

Anna Luciana )
Witness Name (Please Print) )
Royal Bank of Canada, 3499 Portage ) “Kevin Christian”
Road, Niagara Falls, Ont. ) Kevin W. Christian
Address )
)
Assistant Manager, Personal Banking)
Occupation )


DATED at Fonthill, Ontario, on March 16, 2000.

“C.E. Rae” )
Witness Signature )
)
Carol Elizabeth Rae )
Witness Name (Please Print) )
) “M. Powley”
1573 Pelham St. N. ) Mary N. Powley
Address )
)
Teacher )
Occupation )


DATED at Vancouver, British Columbia, on March 31, 2000.


J.A. Angus
A/Executive Director