News Release

Released: 08/01/00 Contact: Dean Pelkey
NR #00/33 (604) 899-6880 or
(BC only) 1-800-373-6393 Vancouver - Buying and selling stocks for clients with a record of U.S. securities violations earned Vancouver investment dealer Jean Claude Hauchecorne a 20-year ban from the market, the British Columbia Securities Commission announced today.

The commission also prohibited Hauchecorne from acting as a director or officer of any issuer and from engaging in investor relations activities for 20 years. Hauchecorne must also pay the costs of the commission hearing.

It was later found that Hauchecorne's clients had ties to organized crime.

In its decision, the commission describes Hauchecorne’s conduct as dishonest, representing an utter failure to meet his responsibility as a “gatekeeper” for the market.

Hauchecorne was an experienced broker who failed to discharge his responsibilities under the Know Your Client rule, one of the most fundamental and important obligations of a registrant, the commission said.

"The Know Your Client rule is described in the Conduct and Practices Handbook as the 'Cardinal Rule.' Compliance by registrants with both the letter and the spirit of the rule is essential to their responsibility to act in the best interests of their clients and to uphold the integrity of the market. Hauchecorne has been found to have deliberately ignored this fundamental principle."

The commission’s ban follows the Canadian Venture Exchange's 1999 decision that Hauchecorne breached the Know Your Client rule by accepting orders from persons that he knew or ought to have known had histories of securities violations in the United States and were associated with organized crime. The exchange also found that Hauchecorne improperly disclosed confidential information about an account that led to the unauthorized removal of funds from the account.

“This was not a case of negligence or bad judgment but rather a case of a willing participant in questionable activity entered into for the purpose of earning rich commissions. The [exchange] rules and by-laws were deliberately ignored,” the exchange panel concluded in its decision.

The CDNX permanently removed Hauchecorne’s right to act as a broker, fined him $200,000 and ordered him to give up $95,000 in commissions and pay the costs of the exchange hearing.

In December 1999 the BCSC reviewed and confirmed the CDNX decision.

Commission staff then asked the commission to make orders under the Securities Act banning Hauchecorne from securities markets in any capacity. A hearing was held on July 24, 2000 resulting in today’s decision.

The commission said it would have been appropriate to order Hauchecorne to pay an administrative penalty but it did not do so in light of the fine and disgorgement order imposed by the exchange. 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 agreement can be viewed in the document data base of the commission’s website www.bcsc.bc.ca or by contacting Media Relations Officer Dean Pelkey at 899-6880.