Settlements
BHARPUR SINGH GILL [Agreed Stmnt.]
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BCSECCOM #:
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Document Type:
Agreed Stmnt.
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Published Date:
1999-10-01
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Effective Date:
1999-09-22
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Details:
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IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418
AND
IN THE MATTER OF BHARPUR SINGH GILL
Agreed Statement of Facts and Undertaking
The following agreement has been reached between Bharpur Singh Gill (“Gill”) and the Executive Director:
1. As the basis for the undertakings referred to in paragraph 2 of this agreement, Gill acknowledges the following facts as correct:
- 1.1 since December 14, 1989, Gill has been registered as a mutual fund salesperson under the Securities Act, R.S.B.C. 1996, c. 418 (the “Act”), with W.H. Stuart Mutuals Ltd. (“WHSM”);
1.2 in 1995, Gill introduced to one of his clients (the “Client”) a security (the “Investment”), which was being offered for sale through an offering memorandum, pursuant to a registration and prospectus exemption in the Securities Act, S.B.C. 1985, c. 83 (the “Prior Act”) that required a purchaser to be qualified as a sophisticated purchaser;
- 1.3 the Client utilized borrowed funds to purchase 70 units of the Investment at a price of $1,000 per unit for an aggregate acquisition cost of $70,000;
1.4 the Client purchased the Investment through Gill, and Gill received the related commission payment;
1.5 Gill gave the Client a payment in the amount of 60% of the commission received by Gill, in connection with the Client’s purchase of the Investment;
1.6 the term “sophisticated purchaser” was set out in the offering memorandum for the Investment, and was defined as being, “a purchaser who…by virtue of [his] net worth and investment experience or [his] consultation with or advice from a person who is not an insider of the respective Company, but who is a registered adviser or a registered dealer, is able to evaluate the prospective investment on the basis of information respecting the investment provided by the respective Company”;
1.7 Gill failed to make enquiries concerning the Client in order to learn the essential facts relative to the Client, including the Client’s risk tolerance and the source of the funds used by the client to purchase the Investment;
1.8 Gill had no basis on which to determine that the Investment was suitable for the Client and, thus, failed to follow the know your client and suitability rules set out in section 43 of the Securities Regulation, B.C. Reg. 270/86, now section 48 of the Securities Rules, R.B.C. 194/97;
- 1.9 Gill advised the Client to purchase the Investment, and the Client relied on the advice provided by Gill;
1.9 Gill was not registered to act as an adviser under the Prior Act, and, therefore, by recommending the Investment to the Client, he breached section 20 of the Prior Act, now section 34 of the Act; and
1.10 Gill has acknowledged that the Investment purchased by the Client was not approved by WHSM for sale by its mutual fund salespersons, and, as such, he sold the Investment without the knowledge and approval of WHSM.
- 2.1 not to engage, except for his own account, in any purchases or sales of any securities offered under a registration and prospectus exemption, while he is registered as a mutual fund salesperson under the Act; and
2.3 to pay to the British Columbia Securities Commission the sum of $2,500, $1,000 of which represents the costs of the investigation and the remainder a penalty, which will be paid into the Industry Education Fund.
3. Gill waives any right he may have, under the Act or otherwise, to a hearing, hearing and review, judicial review or appeal related to, in connection with, or incidental to this agreement.
DATED at Vancouver, British Columbia, on September 22, 1999.
“K. Mann” )
Witness Signature )
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Kirpal Mann____________________)
Witness Name (please print) ) _______________________
- ) Bharpur Singh Gill
Address )
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Branch Manager )
Occupation
DATED at Vancouver, British Columbia, on September 22, 1999.
Steve Wilson
Executive Director