News Release

Released: 10/06/98  Contact: Michael Bernard  899-6500 or (BC only) 1-800-373-6393

Vancouver - The Vancouver Stock Exchange has the right to cancel a former broker’s investor relations contracts with a VSE-listed company because he failed to pay VSE disciplinary fines imposed on him several years ago, the B.C. Securities Commission has ruled.

Former broker Igor Rochacewich had asked the commission to set aside the VSE’s 1995 decision to cancel his and his company’s contracts with the VSE-listed company Forbes Medi-Tech Inc., claiming the exchange erred in law, acted in bad faith and improperly used its powers to collect a debt.

Under its agreements with listed companies, the exchange has the power to decide if an individual is acceptable to be associated with a listed company and to reject that association if the individual is the subject of an unsatisfied exchange sanction such as a fine.

The commission disagreed with Rochacewich’s claims. "In summary, we reject the argument of the applicants and find that there was no bad faith or improper purpose evidenced in the exchange’s decision," a commission panel said in a decision made public today.

"We find no basis for the commission to interfere in this matter and, under section 165(4) of the act, we confirm the decision of the exchange."

Rochacewich signed a settlement agreement in June 1993 to pay the VSE $31,000 in fines and costs after he admitted he concealed bond trades while working at the securities firm Georgia Pacific. He did not pay the fine, later arguing he was not liable because he had declared bankruptcy in July 1991, shortly after the VSE began its investigation. But the commission found that he was still liable for the fine because he signed the settlement agreement after his bankruptcy.

Rochacewich also argued that the exchange erred in law when it forced Forbes to cancel its agreement with his company, LJI Corporate Relations Inc. His company should not be penalized because it was not the subject of the original disciplinary action, he said.

But the commission found that Rochacewich was LJI’s sole owner and that the exchange "is perfectly entitled to find the corporation to be unacceptable to provide the (investor relations) services."

Rochacewich said the VSE was improperly using its power because, rather than protecting the public interest, it was just trying to force Rochacewich to pay a debt. The commission said the exchange had acted appropriately in forcing cancellation of Forbes’ contracts with LJI and Rochacewich.

The commission panel said a provision in the listing agreement was designed to handle exactly the situation before it -- in which a former broker who is subject to a sanction for professional misconduct attempts to work in the marketplace.

The B.C. Securities Commission is an independent agency of the provincial government responsible for regulating trading in securities and exchange contracts.

Copies of the Commission decision may be obtained in person at #200-865 Hornby Street, Vancouver, British Columbia.

The decision can also be accessed through the British Columbia Securities Commission website address: http://www.bcsc.bc.ca.