NIN 97/17 - Settlements with the British Columbia Securities Commission [NIN - Rescinded]

On November 17, 1989 the (then) Superintendent of Brokers issued NIN#89/34 respecting settlement procedures. This Notice replaces NIN#89/34 and provides guidance concerning settlements with the Executive Director.

In this Notice the term "Commission" refers to the individual Commissioners or panels of Commissioners (i.e. the Commission "proper"), rather than the securities regulatory body as a whole.

Authority to Settle

Settlements are the responsibility of the Executive Director and are entered into between the Respondent and the Executive Director. The Commission is not involved in the settlement process.

Why Settle?

A Commission hearing into every allegation of market misconduct is not essential in order that the public interest be served. The Executive Director encourages settlements because they are an effective and efficient way to achieve a regulatory objective. The sanctions resulting from a settlement are generally less than those that would be requested by the Executive Director after a hearing since the Respondent has, by cooperating, enabled the Executive Director and his staff to avoid the time and costs associated with a Commission hearing.

When is Settlement Available?

Settlement is available in every case. If a Respondent wants to settle and is prepared to agree to the facts and sanctions proposed by the Executive Director, there is no longer a dispute that requires resolution by the Commission.

It is to the advantage of all the parties to settle a matter as soon as possible. Settlements may be concluded before or after a Notice of Hearing is issued by the Executive Director.

All settlements must be concluded at least five business days before the date set for the commencement of the Commission hearing. After this time the Respondent may admit any facts for the purpose of expediting the hearing, however the Commission, rather than the Executive Director, will decide what sanctions are appropriate.

Form and Terms of Settlement

A settlement is finalized by way of an agreement between the Respondent and the Executive Director (called an "Agreed Statement of Facts and Undertaking").

As wrongdoing is the rationale for the orders and undertakings that form part of the settlement, all settlements contain an admission of wrongdoing. All settlements also contain an agreed statement of the relevant facts.

All settlements require the payment of a sum of money as contribution to investigation costs. The only exception to this rule will be those cases where the early resolution of the matter has resulted in minimal investigation costs being incurred.

All settlements also contain an undertaking to comply with B.C. securities legislation and a waiver of the Respondent's right to a Commission hearing, judicial review or appeal in connection with the matter.

Settlements may contain other terms, such as an undertaking to offer rescission rights to purchasers of securities or an undertaking to pay a sum to the B.C. Securities Commission in settlement of the matter, however the above-noted terms are common to all settlements.

Settlement Publication

All settlements are published in the B.C. Securities Commission Weekly Summary.

DATED at Vancouver, British Columbia, on June 18, 1997

Paul Bourque
Executive Director