Settlement Agreement: In the Matter of Gordon-Daly Grenadier Securities et al.

July 27, 2000

Settlement Agreement

IN THE MATTER OF THE SECURITIES ACT ,
R.S.O. 1990, c. S.5, AS AMENDED

AND

IN THE MATTER OF
GORDON-DALY GRENADIER SECURITIES, DAVID BREGMAN, ALAN GREENBERG, ORON STERNHILL AND WANGYAL TULOTSANG

SETTLEMENT AGREEMENT

I. INTRODUCTION

1. By notice of hearing dated July 27, 2000 (the "Notice of Hearing"), the Ontario Securities Commission (the "Commission") announced that it proposed to hold a hearing to consider whether, pursuant to subsections 127 and 127.1 of the Securities Act , R.S.O. 1990, c. S.5, as amended (the "Act"), it is in the public interest for the Commission to make an order:

(i) that the registration of Gordon-Daly Grenadier Securities ("Gordon-Daly"), David Bregman ("Bregman"), Alan Greenberg ("Greenberg"), Oron Sternhill ("Sternhill") and Wangyal Tulotsang ("Tulotsang") (together referred to as the "respondents") be suspended or restricted for such time as the Commission may direct, or be terminated, or be subject to such terms and conditions as the Commission may order;

(ii) that trading in securities by Gordon-Daly, Bregman, Greenberg, Sternhill and Tulotsang cease permanently or for such other period as specified by the Commission;

(iii) that Bregman, Greenberg, Sternhill and Tulotsang, or any of them, be prohibited from becoming or acting as a director or officer of any issuer;

(iv) that the respondents, or any of them, be reprimanded;

(v) that the respondents, or any of them, pay costs to the Commission; and/or

(vi) such other order as the Commission considers appropriate.

II. JOINT SETTLEMENT RECOMMENDATION

2. Staff of the Commission ("Staff") agree to recommend settlement of the proceeding initiated in respect of the respondents by the Notice of Hearing in accordance with the terms and conditions set out below. The respondents consent to the making of an order against them in the form attached as Schedule 'A' on the basis of the facts set out below.

III. STATEMENT OF FACTS

Acknowledgment

3. Staff and each of the respondents agree with the facts set out in this Part III for the purpose of this proceeding only.

Facts

4. The respondent, Gordon-Daly is, and was at all material times, registered under Ontario securities law as a securities dealer. Gordon Daly is a partnership of three corporations, Bethmark Investments Limited, ALG Investments Limited and Alon Investments Limited. The three corporations are wholly owned by each of Bregman, Greenberg and Sternhill, respectively.

5. The respondent, Bregman is, and was at all material times, registered under Ontario securities law as an officer of Gordon-Daly, and is the "executive partner" of Gordon-Daly. The respondent, Greenberg is, and was at all material times, registered under Ontario securities law as an officer of Gordon-Daly, and is the "executive general partner" of Gordon-Daly. The respondent, Sternhill is, and was at all material times, registered under Ontario securities law as an officer of Gordon-Daly, and is the "executive partner" of Gordon-Daly. The respondent, Tulotsang has been registered under Ontario securities law since March 10, 1998 as an officer of Gordon-Daly, and is, and was during this time, the controller and the compliance officer of Gordon-Daly. Tulosang's activities at Gordon-Daly were under the direction of Bregman.

6. During the period from 1996 to 1999 (the "material time"), virtually all of Gordon-Daly's business consisted of it acquiring stock for its own account and selling that same stock to its clients (referred to below as "principal trading"). During this same period, in excess of 90% of Gordon-Daly's revenue was derived from principal trading in the stock of thirteen issuers (the "Thirteen Issuers") referred to below, all of which traded through the Canadian Dealing Network Inc. (the "CDN").

7. The Thirteen Issuers are as follows:

1. Black Mountain Minerals Inc. ("Black Mountain");

2. CD Rom Network Inc. ("CD Rom");

3. Century Financial Capital Group Inc. ("Century Financial");

4. Magra Computer Technologies Corp. ("Magra");

5. Olympic Rom World Inc. ("Olympic");

6. Pan Pacific Strategies Corp. ("Pan Pacific");

7. PlanetSafe Enviro Corp. ("PlanetSafe");

8. Polar Innovative Capital Corp. ("Polar Innovative");

9. Southern Reef Ventures Inc. ("Southern Reef");

10. The Streetwear Corporation ("Streetwear");

11. United Pacific Capital Resources Inc. ("United");

12. Westhope Capital Corp. ("Westhope"); and

13. World Wide Interactive Disks Inc. ("World Wide").

8. In the case of the Thirteen Issuers, Gordon-Daly either held stock in its inventory or had exercised option agreements to acquire the stock in the issuer immediately prior to the commencement of principal trading in the stock with its clients. Gordon-Daly acquired stock in the Thirteen Issuers at prices significantly lower than the selling price to its clients. Gordon-Daly re-sold this stock to its own clients at mark-ups above acquisition costs ranging from approximately 56% to approximately 324%, which mark-ups were excessive.

9. During the material time, Gordon-Daly's gross revenue (i.e. revenue from the sale of stock less acquisition costs) earned from principal trading in the stock of the Thirteen Issuers was approximately $31 million.

10. Particulars of the principal trading in the Thirteen Issuers by Gordon-Daly are set out below.

Black Mountain Minerals Inc. ("Black Mountain")

11. Black Mountain is a reporting issuer in Ontario. During the period from January 14, 1998 to May 28, 1999, Gordon-Daly acquired 5.1 million shares of Black Mountain at a weighted average cost of $0.70 per share.

12. During the period of September 1, 1997 to December 30, 1999, Gordon-Daly sold substantially all of its Black Mountain shares to its own clients at a weighted average price of $1.91 per share, generating a gross profit of approximately $5.5 million. The term "weighted average price", as referred to hereafter, is defined as the total dollar value of shares purchased by all clients, divided by the total number of shares purchased by all clients, excluding cancellations and reversals of trades. During this time, Gordon-Daly accounted for approximately 99% of the reported trading of the Black Mountain shares.

13. Gordon-Daly sold Black Mountain shares to its own clients at a mark-up of approximately 173%, which mark-up was excessive. Black Mountain last traded on June 29, 2000 at $0.20.

CD Rom Network Inc. ("CD Rom")

14. CD Rom is a reporting issuer in Ontario. During the period between November 29, 1994 to May 6, 1997, Gordon-Daily acquired 3.6 million shares of CD Rom at a weighted average price of $0.59 per share.

15. During the period from October 2, 1995 to December 23, 1999, Gordon-Daly sold substantially all of its CD Rom shares to its own clients at a weighted average price of $0.92 per share, generating a gross profit of approximately $600,000. During this time, Gordon-Daly accounted for approximately 94% of the reported trading of CD Rom shares.

16. Gordon-Daly sold CD Rom shares to its own clients at a mark-up of approximately 56%, which mark-up was excessive. CD Rom last traded on June 23, 2000 at $0.05.

Century Financial Capital Group Inc. ("Century Financial")

17. Century Financial is a reporting issuer in Ontario. During the period from April 30, 1999 to October 26, 1999, Gordon-Daly acquired 252,000 shares of Century Financial at a weighted average price of $1.69 per share.

18. During the period from February 4, 1999 to December 30, 1999, Gordon-Daly sold substantially all of its Century Financial shares to its own clients at a weighted average price of $2.77 per share, generating a gross profit of approximately $600,000. During this time, Gordon-Daly accounted for approximately 99% of the reported trading in Century Financial shares.

19. Gordon-Daly sold Century Financial shares to its own clients at a mark-up of approximately 64%, which mark-up was excessive.

20. On or about November 1, 1998, Olympic ROM World Inc. ("Olympic") (referred to below) amalgamated with four companies to form Century Financial. Ten shares of Olympic were exchanged for one new share of Century Financial. Century Financial last traded on July 5, 2000 at $1.97 per share, which is equivalent to approximately $.20 per Olympic share.

Magra Computer Technologies Corp. ("Magra")

21. Magra is a reporting issuer in Ontario. During the period from October 10, 1996 to August 28, 1998, Gordon-Daly acquired 8.1 million shares of Magra at a weighted average price of $0.66 per share.

22. During the period from September 12, 1996 to December 31, 1999, Gordon-Daly sold substantially all of its Magra shares to its own clients at a weighted average price of $1.68 per share, generating a gross profit of approximately $3.9 million. During this time, Gordon-Daly accounted for approximately 97% of the reporting trading of Magra shares.

23. Gordon-Daly sold Magra shares to its own clients at a mark-up of approximately 155%, which mark-up was excessive. Magra last traded on June 29, 2000 at $0.09.

Olympic Rom World Inc. ("Olympic")

24. Olympic (referred to in paragraph 20) is a reporting issuer in Ontario. During the period from March 28, 1995 to December 8, 1997, Gordon-Daily acquired 5.4 million shares of Olympic at a weighted average price of $0.54 per share.

25. During the period from August 2, 1995 to December 18, 1998, Gordon-Daly sold substantially all of its Olympic shares to its own clients at a weighted average price of $1.16 per share, generating a gross profit of approximately $1.7 million. During this time, Gordon-Daly accounted for approximately 95% of the reported trading of Olympic shares.

26. Gordon-Daly sold Olympic shares to its own clients at a mark-up of approximately 115%, which mark-up was excessive. As noted above in paragraph 20, on or about November 1, 1998 Olympic amalgamated with four companies to form Century Financial. Ten shares of Olympic were exchanged for one new share of Century Financial. Century Financial last traded on July 5, 2000 at $1.97 per share, which is equivalent to approximately $.20 per Olympic share.

Pan Pacific Strategies Corp. ("Pan Pacific")

27. Pan Pacific is a reporting issuer in Ontario. During the period from November 20, 1995 to December 8, 1997, Gordon-Daly acquired 6.3 million shares of Pan Pacific at a weighted average price of $0.70 per share.

28. During the period from October 3, 1995 to January 19, 1998, Gordon-Daly sold substantially all of its Pan Pacific shares to its own clients at a weighted average price of $1.30 per share, generating a gross profit of approximately $2 million. During this time, Gordon-Daly accounted for approximately 80% of the reported trading of Pan Pacific shares.

29. Gordon-Daly sold Pan Pacific shares to its own clients at a mark-up of approximately 86%, which mark-up was excessive . On January 28, 1998 the Commission ordered Pan Pacific to cease trading in securities for failure to file its annual financial statements for the year ended August 31, 1997. Pan Pacific last traded on January 28, 1998 at $0.40.

PlanetSafe Enviro Corp. ("PlanetSafe")

30. PlanetSafe is a reporting issuer in Ontario. During the period from May 25, 1995 to August 22, 1996, Gordon-Daly acquired 4.9 million shares of PlanetSafe at a weighted average cost of $0.29 per share.

31. During the period from October 2, 1995 to December 29, 1999, Gordon-Daly sold substantially all of its PlanetSafe shares to its own clients at a weighted average price of $1.23 per share, generating a gross profit of approximately $800,000. During this time, Gordon-Daly accounted for approximately 81% of the reported trading in PlanetSafe shares.

32. Gordon-Daly sold PlanetSafe shares to its own clients at a mark-up of approximately 324%, which mark-up was excessive. PlanetSafe last traded on April 18, 2000 at $0.01.

Polar Innovative Capital Corp. ("Polar Innovative")

33. Polar Innovative is a reporting issuer in Ontario. During the period from March 17, 1999 to October 28, 1999, Gordon-Daly acquired 1.7 million shares of Polar Innovative at a weighted average price of $0.62 per share.

34. During the period from January 8, 1999 to December 30, 1999, Gordon-Daly sold substantially all of its Polar Innovative shares to its own clients at a weighted average price of $2.00 per share, generating a gross profit of approximately $1.8 million. During this time, Gordon-Daly accounted for 99% of the reported trading in Polar Innovative shares.

35. Gordon-Daly sold Polar Innovative shares to its own clients at a mark-up of approximately 223%, which mark-up was excessive. Polar Innovative last traded on July 5, 2000 at $2.00. As at July 6, 2000, Gordon-Daly accounted for approximately 95% of the reported trading in Polor Innovative.

Southern Reef Venture Inc. ("Southern Reef")

36. Southern Reef is a reporting issuer in Ontario. During the period from October 15, 1996 to April 29, 1999 Gordon-Daly acquired 7.9 million shares of Southern Reef at a weighted average price of $0.50 per share.

37. During the period from September 10, 1996 to December 31, 1999, Gordon-Daly sold substantially all of its Southern Reef shares to its own clients at a weighted average price of $1.22 per share, generating a gross profit of approximately $4.1 million. During this time, Gordon-Daly accounted for 97% of the reported trading of Southern Reef shares.

38. Gordon-Daly sold Southern Reef shares to its own clients at a mark-up of approximately 144%, which mark-up was excessive. Southern Reef last traded on June 26, 2000 at $0.10.

The Streetwear Corporation ("Streetwear")

38. Streetwear is a reporting issuer in Ontario. On October 29, 1999, Gordon-Daly acquired 250,000 shares of Streetwear at a weighted average cost of $1.05 per share.

39. During the period from July 14, 1999 to December 31, 1999, Gordon-Daly sold substantially all of its Streetwear shares to its own clients at a weighted average price of $3.15 per share, generating a gross profit of approximately $500,000. During this time, Gordon-Daly accounted for 88% of the reported trading in Streetwear shares.

40. Gordon-Daly sold Streetwear shares to its own clients at a mark-up of approximately 200%, which mark-up was excessive. Streetwear last traded on July 5, 2000 at $2.45. As at July 6, 2000 Gordon-Daly accounted for 95% of the reported trading in Streetwear shares.

United Pacific Capital Resources Inc. ("United")

41. United is a reporting issuer in Ontario. During the period from January 11, 1999 to October 8, 1999 Gordon-Daly acquired 1.2 million shares of United Class "B" shares at a weighted average price of $1.24 per share.

42. During the period from August 28, 1998 to December 23, 1999, Gordon-Daly sold substantially all of its United Class "B" shares to its own clients at a weighted average price of $2.88 per share, generating a gross profit of approximately $1.4 million. During this time, Gordon-Daly accounted for approximately 98% of the reported trading of United Class "B" shares.

43. Gordon-Daly sold United shares to its own clients at a mark-up of approximately 132%, which mark-up was excessive. United last traded on March 22, 2000 at $1.72. As at March 22, 2000, Gordon-Daly accounted for 97% of the reported trading in United.

Westhope Capital Corp. ("Westhope")

44. Westhope is a reporting issuer in Ontario. During the period from June 25, 1997 to March 9, 1999, Gordon-Daly acquired 5 million shares of Westhope at a weighted average price of $0.51 per share.

45. During the period from May 12, 1997 to December 24, 1999, Gordon-Daly sold substantially all of its Westhope shares to its own clients at a weighted average price of $1.55 per share, generating a gross profit of approximately $4.1 million. During this time, Gordon-Daly accounted for approximately 98% of the reported trading in Westhope shares.

46. Gordon-Daly sold Westhope shares to its own clients at a mark-up of approximately 204%, which mark-up was excessive. Westhope last traded on June 13, 2000 at $0.15.

World Wide Interactive Disks Inc. ("World Wide")

47. World Wide is a reporting issuer in Ontario. During the period from April 25, 1997 to April 1, 1999, Gordon-Daly acquired 5.1 million shares of World Wide at a weighted average price of $0.50 per share.

48. During the period from January 13, 1997 to December 30, 1999, Gordon-Daly sold substantially all of its World Wide shares to its own clients at a weighted average price of $1.47 per share, generating a gross profit of approximately $3.8 million. During this time, Gordon-Daly accounted for approximately 97% of the reported trading in World Wide shares.

49. Gordon-Daly sold World Wide shares to its own clients at a mark-up of approximately 194%, which mark-up was excessive. World Wide last traded on June 8, 2000 at $0.15.

Misrepresentations Made or Authorized by Bregman, Greenberg and Sternhill

50. Gordon-Daly acted as market-maker for a number of the Thirteen Issuers. Pursuant to s. 155 of the Regulation to the Act, a registered dealer who wishes to act as a market-maker must make application for approval to so act in accordance with Form 41.

51. Form 41 requires the applicant to state whether or not it has a relationship with the promoter of the issuer. In each application made, either Bregman or Sternhill stated that Gordon-Daly had no direct or indirect association, dealings or arrangements with the issuer or any promoter of the issuer

52. In respect of eight of the Thirteen Issuers for which Gordon-Daly was market-maker, the promoter of the issuer was Harry Bregman. Harry Bregman was an original founder of Gordon-Daly and is the father of Bregman and the father-in-law of Sternhill.

53. The eight issuers for which Gordon-Daly was market-maker and Harry Bregman was promoter are:

Black Mountain Minerals Inc.
CD Rom Network Inc.
Olympic World Inc.
Polar Innovative Capital Corp.
Southern Reef Ventures Inc.
United Pacific Capital Resources Inc.
Westhope Capital Corp.
World Wide Interactive Disks Inc.

55. In making the statement that Gordon-Daly had no direct or indirect association, dealings or arrangements with a promoter of the issuer, in respect of those issuers listed above, each of Sternhill and Bregman made statements in certain applications that in a material respect and in light of the circumstances under which the statements were made, were misleading or untrue. Greenberg knew, or ought to have known, that Sternhill and Bregman were making the misleading statements and either authorized, permitted or acquiesced in the making of the misstatements by Sternhill and Bregman. In so doing, each of Sternhill, Bregman and Greenberg acted in breach of Ontario securities law, and in particular section 122(1)(b) of the Act, and contrary to the public interest.

56. Form 41 also requires the applicant to state whether or not the insiders or promoters of the issuer, which are known to the applicant, after reasonable enquiry, are trading clients of the applicant. In each application made, either Bregman or Sternhill stated that the insiders of the issuer are not trading clients of the applicant, Gordon-Daly.

57. In respect of those issuers listed below, insiders of the issuer were trading clients of Gordon-Daly at the time the application to be a market-maker, Form 41, was filed.

Issuer		Insider/Client of Gordon-Daly
1.	Black Mountain Minerals Inc.	James McCannell, President & Director Milton Klyman, Director Fred Munger, Secretary-Treasurer & Director Gerald Iscove, Director
2.	CD Rom Network Inc.	Gordon Wilton, President & Director Samuel Greenberg, Secretary-Treasurer & Director
3.	Olympic Rom World Inc.	Gordon Wilton, President & Director Samuel Greenberg, Secretary-Treasurer & Director Gerald Iscove, Director Milton Klyman, Director
4.	PlanetSafe Enviro Corp.	Gerald Iscove, Director Milton Klyman, Director
5.	Polar Innovative Capital Corp.	James McCannell, President & Director Milton Klyman Fred Munger, Secretary-Treasurer & Director Gerald Iscove, Director
6.	Southern Reef Ventures Inc.	Milton Klyman, President, Secretary-Treasurer & Director Gordon Magrill, Director
7.	United Pacific Capital Resources Inc.	James McCannell, President & Director Milton Klyman, Secretary-Treasurer & Director Fred Munger, Director Gerald Iscove, Director
8.	Westhope Capital Corp.	James McCannell, President & Director Milton Klyman, Secretary-Treasurer & Director Fred Munger, Director Gordon Magrill, Director
9.	World Wide Interactive Disks Inc.	Gordon Wilton, President & Director Milton Klyman, Secretary-Treasurer & Director

58. In making the statement that the insiders of the issuers listed above were not trading clients of Gordon-Daly, Sternhill and Bregman made statements in an application that in a material respect and in light of the circumstances under which the statements were made, were misleading or untrue. Greenberg knew, or ought to have known, that Sternhill and Bregman were making the misleading statements and either authorized, permitted or acquiesced in the making of the misstatements by Sternhill and Bregman. In so doing, each of Sternhill, Bregman and Greenberg acted in breach of Ontario securities law, and in particular, section 122(1)(b) of the Act, and contrary to the public interest.

Failure to Keep Books and Records Required Under Ontario Securities Law

59. During the material time, Gordon-Daly failed to keep such books, records and other documents as are required under Ontario securities law, and in particular, as are required under section 19 of the Act. In particular, in response to Staff's request to deliver certain books and records pursuant to an order under subsection 19(3) of the Act, Gordon-Daly advised that it was unable to retrieve and produce to Staff the following documents:

(i) All New Client Application Forms, including updates, and all other account opening documentation for all accounts in the name of Harry Bregman, Jim McCannell, Milton Klyman, Gordon Magrill, Fidelity Commerce Securities Corp., Fred Munger, Gordon Wilton, Jerry Iscove, Irwin Singer in Trust, Double A.J. Limited, J.C. David Securities Ltd. and Sam Greenberg; and

(ii) The account opening date(s) and, where applicable, closing date(s) for each account of Harry Bregman, Jim McCannell, Milton Klyman, Gordon Magrill, Fidelity Commerce Securities Corp., Fred Munger, Gordon Wilton, Jerry Iscove, Irwin Singer in Trust, Double A.J. Limited, J.C. David Securities Ltd. and Sam Greenberg.

Conduct of the Respondents Contrary to the Public Interest

60. In engaging in the conduct described above, the respondents may have failed to deal fairly, honestly and in good faith with their clients, in breach of the requirements set out in Ontario securities law, and in particular, subsections 2.1(1) and (2) of Rule 31-505, may not have acted in the best interests of their clients, and acted contrary to the public interest. The respondents, Bregman, Greenberg, Sternhill and Tulotsang authorized, permitted or acquiesced in the contraventions by Gordon-Daly, as described above, and acted contrary to the public interest.

61. Further, as described above, Sternhill and Bregman made statements in certain Form 41 applications, that in a material respect and in light of the circumstances under which the statements were made, were misleading or untrue, and in breach of Ontario securities law, and contrary to the public interest. Greenberg, as a registered officer of Gordon-Daly, either authorized, permitted or acquiesced in the making of the misstatements by Sternhill and Bregman.

62. As described above, Gordon-Daly failed to keep such books, records and other documents as are required under Ontario securities law, and in particular, as are required under section 19 of the Act. The respondents, Bregman, Greenberg, Sternhill and Tulotsang authorized, permitted or acquiesced in the contraventions by Gordon-Daly to keep such records as are required under Ontario securities law.

IV. TERMS OF SETTLEMENT

63. The respondents agree to the following terms of settlement:

1. the respondents will be reprimanded by the Commission;

2. the respondents Bregman and Sternhill will cease trading in securities for a period of three years effective from the date of approval of this Settlement Agreement by the Commission, and the respondent Greenberg will cease trading in securities for a period of one year, from the date of approval of this Settlement Agreement by the Commission;

3. on or before three business days from the date of approval of this settlement, Gordon-Daly will have sent to each of its clients a letter in the form attached as Schedule "B";

4. the registration of Gordon-Daly, Bregman (for a period of sixteen years), Greenberg (for a period of fifteen years), Sternhill (for a period of fifteen years) and Tulotsang (for a period of two years) will be suspended thirty days from the approval of this Settlement Agreement by the Commission;

5. the following terms and conditions will be imposed upon the registration of Gordon-Daly (hereafter, also referred to as the "registrant"), effective on the date of approval of this Settlement Agreement and continuing for the duration of Gordon-Daly's registration:

(a) the registrant will not act as principal or as agent in the purchase or sale of any securities to a client of the registrant;

(b) the registrant shall, by the effective date of suspension, cease to carry on its activities as a securities dealer;

(c) the registrant shall limit its activities to the orderly wind-up of its business and affairs, including the return of all clients' securities and free credit balances, or the transfer of those securities and balances to a firm that is a member of the Investment Dealers Association of Canada (the "IDA"), upon the request of the client. The return of all clients' securities and free credit balances or the transfer of those securities and balances to a firm that is a member of the IDA, upon the request of the client, must be completed prior to the effective date of suspension of the registration of the registrant.

(d) the registrant shall file the following documents with the Manager of Compliance of the Ontario Securities Commission ("the Manager") on the following dates:

(i) thirty days after the effective date of suspension, a balance sheet of the registrant reported thereon by the registrant's independent auditor without qualification as at the effective date of suspension, or such other date as may be agreed upon between the registrant and the Manager; and

(ii) forty-five days after the effective date of suspension or such other date as may be agreed upon between the registrant and the Manager, a comfort letter prepared by the registrant's independent auditor in accordance with section 5815 of the CICA Handbook confirming that the financial obligations of Gordon-Daly to its clients have been discharged.

(e) in the course of transferring client accounts to a firm that is a member of the IDA, the registrant shall transfer all of the registrant's books and records necessary to record properly its business transactions and financial affairs relating to those client accounts, whether or not such books and records are kept by means of mechanical, electronic or other devices;

(f) The registrant will not:

(i) reduce its share capital in any manner, including the redemption, re-purchase or cancellation of any of its shares;

(ii) reduce or repay any indebtedness which has been subordinated;

(iii) directly or indirectly make any payments, including payments by way of reimbursement for services rendered, loan, advance, bonus, dividend, repayment of capital or other distribution to:

(a) any director, officer, partner or shareholder of the registrant; or

(b) any related, associated or affiliated person or company of the registrant or of any such person; or

(iv) increase its capital assets as defined pursuant to section 3060 of the CICA Handbook unless pursuant to a commitment entered into prior to July 12, 2000;

until such time as the registrant files with the Manager of Compliance of the Ontario Securities Commission an auditor's comfort letter in accordance with section 5815 of the CICA Handbook confirming that Gordon-Daly's financial obligations to its clients have been discharged.

6. The respondents, Bregman, Greenberg, Sternhill and Tulotsang (as the case may be) each undertake to the Commission the following, from the date of the approval of this Settlement Agreement by the Commission:

(i) Bregman, for a period of sixteen years, Greenberg and Sternhill for a period of fifteen years, will not apply for registration in any capacity under Ontario securities law;

(ii) effective ninety days from the approval of this Settlement Agreement by the Commission, Bregman, Greenberg and Sternhill will not be involved directly or indirectly in the management of a registrant;

(iii) Bregman, Greenberg and Sternhill will not collectively or singly, own, directly or indirectly, greater than a 20% interest in any registrant;

(iv) Bregman, for a period of sixteen years, Greenberg and Sternhill for a period of fifteen years, will not act as an officer, director or promoter, or own collectively or singly greater than 20% of a reporting issuer;

(v) Tulotsang, for a period of two years, will not apply for registration in any capacity under Ontario securities law;

(vi) Tulotsang, for a period of two years, will not be involved directly or indirectly in the management of a registrant or a reporting issuer;

(vii) Tulotsang, for a period of two years, will not own, directly or indirectly, greater than a 20% interest, singly, or in conjunction with the other respondents, in any registrant or a reporting issuer;

(viii) Tulotsang, for a period of two years, will not act as an officer, director or promoter of a reporting issuer;

(ix) Tulotsang will not apply for registration until successful completion of the Canadian Securities Course, the Conduct and Practices Handbook Course, and take the Partners', Directors' and Senior Officers' Qualifying Examination.

7. the respondents will make a single payment of $25,000 to the Commission in respect of a portion of the Commission's costs with respect to this matter.

V. STAFF COMMITMENT

64. If this settlement is approved by the Commission, Staff will not initiate any complaint to the Commission or request the Commission to hold a hearing or issue any other order in respect of any conduct or alleged conduct of the respondents in relation to the facts set out in Part III of this agreement.

65. If this settlement is approved by the Commission, Staff will not initiate any other proceeding against the respondents in relation to the facts set out in Part III of this agreement.

VI. PROCEDURE FOR APPROVAL OF SETTLEMENT

66. Approval of the settlement set out in this agreement shall be sought at the public hearing of the Commission scheduled for August 9, 2000, or such other date as may be agreed to by Staff and the respondents, in accordance with the procedures described in this agreement.

67. Staff and the respondents agree that if this agreement is approved by the Commission, it will constitute the entirety of the evidence to be submitted respecting the respondents in this matter, and the respondents agree to waive their rights to a full hearing and appeal of the matter under the Act.

68. Staff and the respondents agree that if this settlement is approved by the Commission, no party to this agreement will make any public statement inconsistent with this agreement.

69. If, at the conclusion of the settlement hearing, and for any reason whatsoever, this settlement is not approved by the Commission or an order in the form attached as Schedule 'A' is not made by the Commission:

(a) each of Staff and the respondents will be entitled to all available proceedings, remedies and challenges, including proceeding to a hearing of the allegations in the Notice of Hearing and Statement of Allegations, unaffected by this agreement or the settlement negotiations;

(b) the terms of this agreement will not be referred to in any subsequent proceeding, or disclosed to any person, except with the written consent of Staff and the respondents or as may be required by law; and

(c) the respondents agree that they will not, in any proceeding, refer to or rely upon this agreement or the negotiation or process of approval of this agreement as the basis for any attack on the Commission's jurisdiction, alleged bias, appearance of bias, alleged unfairness or any other remedies or challenges that may otherwise be available.

VII. DISCLOSURE OF AGREEMENT

70. Counsel for Staff or for the respondents may refer to any part or all of this agreement in the course of the hearing convened to consider this agreement. Otherwise, this agreement and its terms will be treated as confidential by all parties to the agreement until approved by the Commission, and forever if, for any reason whatsoever, this settlement is not approved by the Commission, except with the written consent of all parties or as may be required by law.

71. Any obligations of confidentiality shall terminate upon approval of this settlement by the Commission.

VIII. EXECUTION OF SETTLEMENT AGREEMENT

72. This Settlement Agreement may be signed in one or more counterparts which together shall constitute a binding agreement and a facsimile copy of any signature shall be as effective as an original signature.

July 27 th , 2000.

GORDON-DALY GRENADIER SECURITIES

"David Bregman"

"Alan Greenberg"

"Oron Sternhill"

"Wangyal Tulotsang"

STAFF OF THE ONTARIO SECURITIES COMMISSION

SCHEDULE "A"

WHEREAS on July 27, 2000, the Ontario Securities Commission (the "Commission") issued a notice of hearing pursuant to subsections 127(1) and 127.1 of the Securities Act (the "Act") in respect of Gordon-Daly Grenadier Securities ("Gordon-Daly"), David Bregman ("Bregman"), Alan Greenberg ("Greenberg"), Oron Sternhill ("Sternhill") and Wangyal Tulotsang ("Tulotsang");

AND WHEREAS Gordon-Daly, Bregman, Greenberg, Sternhill and Tulotsang entered into a settlement agreement dated July 27, 2000 (the "Settlement Agreement") in which they agreed to a proposed settlement of the proceeding, subject to the approval of the Commission;

AND UPON reviewing the Settlement Agreement and the statement of allegations of Staff of the Commission, and upon hearing submissions from counsel for Gordon-Daly, Bregman, Greenberg, Sternhill and Tulotsang and from Staff of the Commission;

AND WHEREAS the Commission is of the opinion that it is in the public interest to make this Order;

IT IS ORDERED THAT:

(1) the Settlement Agreement dated July 27, 2000, attached to this Order, is hereby approved;

(2) pursuant to clause 2 of subsection 127(1) of the Act, Bregman and Sternhill are each prohibited from trading in securities for a period of three years effective from the date of this Order;

(3) pursuant to clause 2 of subsection 127(1) of the Act, Greenberg is prohibited from trading in securities for a period of one year effective from the date of this order;

(4) pursuant to clause 6 of subsection 127(1) of the Act, Gordon-Daly, Bregman, Greenberg, Sternhill and Tulotsang are hereby reprimanded;

(5) pursuant to clause 1 of subsection 127(1) of the Act, the registration of each of Gordon-Daly, Bregman (for a period of sixteen years), Greenberg (for a period of fifteen years), Sternhill (for a period of fifteen years) and Tulotsang (for a period of two years) is hereby suspended effective forty-five days from date of this order;

(6) Gordon-Daly shall, on or before three days from the date of this order, send to each of its clients a letter substantially in the form attached as Schedule "B" to the Settlement Agreement;

(7) pursuant to clause 1 of subsection 127(1) of the Act, the following terms and conditions are hereby imposed upon the registration of Gordon-Daly:

(a) the registrant will not act as principal or as agent in the purchase or sale of any securities to a client of the registrant;

(b) the registrant shall, within thirty days of the date of this order, cease to carry on its activities as a securities dealer;

(c) the registrant shall limit its activities to the orderly wind-up of its business and affairs, including the return of all clients' securities and free credit balances, or the transfer of those securities and balances to a firm that is a member of the Investment Dealers Association of Canada (the "IDA"), upon the request of the client. Gordon-Daly will pay all costs of transfers of clients' securities and credit salaries from Gordon-Daly to a firm that is a member of the IDA. The return of all clients' securities and free credit balances or the transfer of those securities and balances to a firm that is a member of the IDA must be completed prior to the effective date of suspension of the registration of the registrant;

(d) the registrant shall file the following documents with the Manager of Compliance of the Ontario Securities Commission ("the Manager") on the following dates:

(i) thirty days after the date of suspension, a balance sheet of the registrant reported thereon by the registrant's independent auditor without qualification as at the date of suspension, or such other date as may be agreed upon between the registrant and the Manager; and

(ii) forty-five days after the date of suspension or such other date as may be agreed upon between the registrant and the Manager, a comfort letter prepared by the registrant's independent auditor in accordance with section 5815 of the CICA Handbook confirming that the financial obligations of Gordon-Daly to its clients have been discharged.

(f) The registrant will not:

(i) reduce its share capital in any manner, including the redemption, re-purchase or cancellation of any of its shares;

(ii) reduce or repay any indebtedness which has been subordinated;

(iii) directly or indirectly make any payments, including payments by way of reimbursement for services rendered, loan, advance, bonus, dividend, repayment of capital or other distribution to:

(a) any director, officer, partner or shareholder of the registrant; or

(b) any related, associated or affiliated person or company of the registrant or of any such person; or

(iv) increase its capital assets as defined pursuant to section 3060 of the CICA Handbook unless pursuant to a commitment entered into prior to July 12, 2000;

(8) pursuant to clause 127.1(2)(b) of the Act, the respondents are ordered to make payment in the amount of $25,000 by certified cheque to the Commission.

August 9 th , 2000.

"J. A. Geller"
"Robert W. Korthals"
"R. Stephen Paddon"

SCHEDULE "B"

[on letterhead of Gordon-Daly]

Dear [client]:

We are writing to advise that Gordon-Daly Grenadier Securities ("Gordon-Daly") is proceeding with the orderly wind-up of its business and affairs.

Gordon-Daly wishes to avoid inconveniencing you during this period of transition and so the purpose of this letter is to tell you about the two options available to you regarding your account with Gordon-Daly:

(A) You receive your cash and securities - If you choose option 'A' on the form attached, Gordon-Daly will deliver to you by mail to your address of record the cash and/or securities currently held in your account.

(B) We transfer your account - If you choose option 'B' on the form attached, Gordon-Daly will transfer your account to any firm, designated by you, that is a member of the Investment Dealers Association.

Please choose your preferred option and return the attached form to Gordon-Daly in the enclosed postage-paid envelope. Please be advised that if you do nothing or if we do not receive your instructions by [date], your account will automatically be transferred to [firm].

Should you have any questions, you should feel free to call our offices in Toronto at 416-[insert telephone number].

Thank you very much.

Yours truly,