News Release
Securities Commission Releases Keywest Decision
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Date:
1995-04-07 -
Number:
95/12
Released: April 4, 1995 Contact: Ron Messent 660-4800 or 1-800-373-6393
The British Columbia Securities Commission has imposed a 17-year prohibition from trading securities and from being a director or officer of a public company on John W.S. Roeder, a resident of Idaho and the president of Keywest Resources Ltd.
One other director of Keywest -- W. Gordon Buchanan -- faces the same prohibitions for three years. Two directors -- Veryan E. Thompson and Ben E. Stang -- are each prohibited from being a director or officer of a public company for 3 years.
The penalties were announced today in a decision by the Securities Commission following a November-December 1994 hearing into Keywest's affairs and the conduct of its directors and officers.
Keywest was listed on the Vancouver Stock Exchange from May 1992 to March 1994. In July 1993, the Commission imposed a freeze order on Keywest's assets and a temporary cease trading order on its shares. The cease trading order has been extended pending a second hearing related to Keywest's affairs, in the matter of Timothy Pinchin. This hearing is scheduled for September 1995. The freeze order also remains in effect.
In its decision released today, the Commission found that Keywest had failed to disclose certain material changes in its affairs, issued false and misleading news releases, and filed a false and misleading information circular and quarterly report.
The Commission said
"Keywest went public on the basis of an oil and gas property and raised money from investors to fund a very specific development project. Within four months it failed to renew its oil and gas leases and within nine months it had disposed of its entire property without carrying out the project described in the prospectus.
"Part of the proceeds of the public offering were used instead to pay off a shareholder loan from the chief executive officer of Keywest. None of this was properly disclosed to investors. It then embarked on a change of control and change of business, structured to evade regulatory approval requirements, and again failed to make proper disclosure."
The Commission found that Roeder was primarily responsible for the disclosure violations and that he breached his duties as a director and officer of Keywest. He also proceeded, despite a clear warning from the Exchange, to sell control and facilitate a change in Keywest's business without regulatory approval.
Thompson, Stang and Buchanan were all found to have failed to carry out their duties as directors of Keywest. Buchanan also failed to file insider reports disclosing two trades in Keywest shares.
The British Columbia Securities Commission is a provincial government agency responsible for regulating trading in securities and exchange contracts.
Copies of the Commission's decision (30 pages) may be obtained in person at 1100 - 865 Hornby Street, Vancouver, British Columbia.