Settlements

JOHN W. PFEFFER [Settlement Agrmt.]

BCSECCOM #:
2000 BCSECCOM 304
Document Type:
Settlement Agrmt.
Published Date:
2000-11-29
Effective Date:
2000-11-24
Details:


2000 BCSECCOM 304


IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418

AND

IN THE MATTER OF JOHN W. PFEFFER

Settlement Agreement

[para 1]
1. The following settlement of issues has been reached between John W. Pfeffer ("Pfeffer") and the Executive Director.

Agreed Statement of Facts

[para 2]
2. Pfeffer acknowledges the following facts as correct only for the purposes of regulatory proceedings here or elsewhere:

2.1 During the period of September 1995 to January 1999, (the "Material Period"), Pfeffer was a director and the President of HARS Systems Inc. ("HARS");

2.2 HARS, whose head office is located in Calgary, Alberta, is an exchange issuer under the Securities Act. R.S.B.C. 1996, c. 418 (the "Act");

2.3 Pfeffer, after becoming a director of HARS in September 1995, failed to file a Form 4B within 30 days, contrary to section 90 of the Act;

2.4 After being advised by staff of the British Columbia Securities Commission (the "Commission") that he was in breach of section 90 of the Act, Pfeffer filed a Form 4B on April 26, 1999;

2.5 During the Material Period, Pfeffer acquired 5,357,725 shares of HARS and filed Form 36 Insider Reports (the "Reports") disclosing his direct, or indirect beneficial ownership of, or control or direction over, securities of HARS pursuant to section 87 of the Act;

2.6 The Reports, however, were deficient as they were incomplete and they were not submitted in the required form;

2.7 As a result, on April 13, 1999, a Cease Trade Order ("CTO") under section 164 of the Act was issued by the Executive Director against Pfeffer. The CTO was revoked on April 29, 1999, when Pfeffer submitted bulk filings of amended insider reports (the "Amended Reports");

2.8 Pfeffer was also asked to provide account statements to support his filings. The account statements did not match up with the Amended Reports and a second CTO was issued on August 31, 1999 (the "Second CTO");

2.9 The Second CTO was revoked on December 2, 1999, when Pfeffer submitted insider reports that matched the account statements and Pfeffer provided an affidavit attesting to their accuracy;

2.10 Though Pfeffer submitted acceptable insider reports after the Second CTO, none of the reports were filed within 10 days after the end of the month in which the changes took place, as required by section 87(2) of the Act;

2.11 On December 28, 1995, Pfeffer acquired 550,000 shares of HARS which brought Pfeffer's total share holdings to 12% of the issued and outstanding shares of HARS;

2.12 As Pfeffer's holdings amounted to more than 10% of HARS issued and outstanding shares, Pfeffer contravened section 111 of the Act when he failed to file a press release and an acquisition report for this acquisition;

2.13 Subsequent to the acquisition referred to in paragraph 2.11, Pfeffer continued to acquire shares of HARS, and on the following occasions, Pfeffer's acquisitions amounted to an increase of an additional 2% or more of the issued and outstanding shares of HARS:

2.13.1 on January 12, 1996, Pfeffer acquired 250,000 shares of HARS which represented an increase of 2.3% of the issued and outstanding shares of HARS;

2.13.2 on February 5, 1996, Pfeffer acquired 500,000 shares of HARS which represented an increase of 4.2% of the issued and outstanding shares of HARS;

2.13.3 on July 18, 1996, Pfeffer acquired 950,000 shares of HARS which represented an increase of 6.7% of the issued and outstanding shares of HARS; and

2.14 For each of the acquisitions outlined in paragraphs 2.13.1 to 2.13.3, Pfeffer failed to file a press release and an acquisition report as required by section 111 of the Act.

Mitigating Factors

[para 3]
3. Pfeffer's bulk filings of his insider reports are in the required form and Pfeffer has paid all applicable late filings fees.

[para 4]
4. In his efforts to amend his filings, Pfeffer engaged legal counsel to ensure that the filings were completed in accordance with requirements. In doing so, Pfeffer dispersed $11,710.47 in legal fees.

[para 5]
5. Pfeffer has never sold any of his shares of HARS.

[para 6]
6. Although Pfeffer failed to file insider reports in the proper form for a prolonged period of time, Pfeffer's deficiency appears to be the result of an administrative inefficiency as opposed to an attempt to conceal his share position from the public.

Order

[para 7]
7. In respect of Pfeffer's failure to file insider reports in accordance with the requirements of section 87 of the Act, and his failure to file a press release and an acquisition report in accordance with section 111 of the Act, Pfeffer consents to an order of the Executive Director (the “Order”) that:

7.1 under section 161(1)(c) of the Act, the exemptions described in sections 44 to 47, 74, 75, 98 and 99, do not apply to Pfeffer, acting directly or indirectly through another person, company or trust acting on his behalf, for a period of 6 months:
    7.1.1 except that Pfeffer may dispose of securities beneficially owned by him at the date of the Order;

    7.1.2 that any such disposition must take place through a single registered dealer designated in writing by Pfeffer and approved by the Executive Director;

    7.1.3 that before any such trades take place, Pfeffer must deliver to the registered dealer a copy of the Order; and

    7.1.4 that Pfeffer will instruct his registered dealer to provide the Executive Director with a copy of the confirmation slip evidencing the disposition within four days of the date of the sale.

    Undertaking

    [para 8]
    8. Pfeffer undertakes to pay to the Commission, the sum of $20,000, of which $5,000 represents the costs to the Commission of the investigation.

    Waiver

    [para 9]
    9. Pfeffer 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 and Order.

    DATED at Vancouver, British Columbia, on November 16, 2000.


    Karl H. Schramm )
    Witness
    )
    Karl H. Schramm ) per: John Pfeffer
    Witness Name (Please print) ) John W. Pfeffer
    )
    631 Mt. Tamalpais Way, Boulder City, NV)
    Address )
    )
    retired )
    Occupation )


    DATED at Vancouver, British Columbia, on November 24, 2000.




                            Steve Wilson
                            Executive Director
    ©2024 British Columbia Securities Commission