News Release

Released: 03/09/00 Contact: Michael Bernard
899-6500 or
(BC only) 1-800-373-6393

Vancouver -- The British Columbia Securities Commission has cancelled the registration of portfolio manager Noram Capital Management Inc., after finding that Noram failed to meet its working capital requirements, filed misleading financial statements with the commission, and misled commission staff.

The commission panel also imposed an administrative penalty of $25,000.

Noram, a portfolio manager registered under the securities legislation in B.C., Alberta, Manitoba and Ontario, has had its registration suspended in British Columbia since September 1999 pending the commission’s decision, which came after a hearing on Jan. 20.

About 25% of Noram’s clients are B.C. residents. Its registration is also under suspension in Ontario.

Working capital is an indication of a company’s ability to pay the expenses of carrying on business, including payroll and office overhead. Working capital is defined as current assets minus current liabilities.

Under securities regulations, Noram was required to maintain at least $35,000 in working capital. The Commission found that Noram has contravened this requirement since at least June 1998 and that as of Aug. 31, 1999, Noram had a working capital deficiency of $485,872, or $520,872 less than required under the rules.

“The requirements that portfolio managers maintain a minimum amount of working capital is designed to ensure that those who seek to handle the funds of others have some minimum level of financial substance,” the commission said. “Minimum working capital requirements are therefore one of the key obligations that registrants are expected to meet in order to provide protection to investors.”

The commission also found that Noram misled commission staff by filing false and misleading financial statements. The statements showed an $830,000 equity investment in Noram by its president, Andrew Willman, but the transaction was a sham, the commission found.

“Noram’s working capital appeared higher than it was,” the panel said in its decision. “There is no reasonable explanation of this scheme other than it was an attempt by Willman and Noram to mislead commission staff as to Noram’s true working capital.”

In ordering that Noram’s registration be cancelled, the panel said, “It is clear from Noram’s conduct that it is prepared to mislead the commission as necessary for its own purposes, and that it has no regard for its obligations as a registrant under the Act and the Rules. This conduct is inconsistent with the requirements and expectations the Commission has of registrants.”

Commission staff was directed to send a copy of the commission’s decision to all of Noram’s B.C. clients.

A hearing is scheduled for April to hear related allegations relating to Noram president Andrew Willman and director Suzan Khan. The commission made no order as to costs, pending its decision in that matter.

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

A copy of the decision can be viewed on the commission’s Web site (www.bcsc.bc.ca) or by contacting Communications Manager Michael Bernard at (604) 899-6524 or 1-800-373-6393 (toll-free in B.C. only).