Settlement Agreement: In the Matter of Russell Millard
IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, c. S.5, AS AMENDED
- and -
IN THE MATTER OF RUSSELL MILLARD
SETTLEMENT AGREEMENT
I. INTRODUCTION
1.By Notice of Hearing to be issued forthwith, (the "Notice of Hearing"), the Ontario Securities Commission (the "Commission") will hold a hearing to consider whether, pursuant to section 127 and 127.1 of the Securities Act, R.S.O. 1990, c. S.5, as amended, (the "Act"), in the opinion of the Commission it is in the public interest for the Commission:
(a)to make an order that the registration of Russell Millard be terminated or suspended or restricted for such period as the Commission may order;
(b)to make an order that Russell Millard cease trading in securities permanently or for such period as the Commission may order;
(c)to make an order that Russell Millard resign any positions he holds as a director or officer of an issuer;
(d)to make an order to prohibit Russell Millard from becoming or acting as a director or officer of any issuer permanently or for such period as the Commission may order;
(e)to make an order that the Russell Millard pay the costs of the Commission's investigation and this proceeding; and/or
(f)to make such other order as the Commission may deem appropriate;
II. JOINT SETTLEMENT RECOMMENDATION
2.The Staff of the Commission ("Staff") agree to recommend the settlement of the proceedings initiated in respect of Russell Millard ("Millard") by the Notice of Hearing in accordance with the terms and conditions set out below. Millard agrees to the settlement on the basis of the facts agreed to as set out below and consents to the making of an order against him in the form attached as Schedule "A" on the basis of those facts.
3.This settlement agreement, including the attached Schedule "A", will be released to the public only if and when the settlement is approved by the Commission.
III. STATEMENT OF FACTS
Acknowledgment
4. Staff and Millard agree with the facts set out in this Part III.
Factual Background
5.Millard is an individual who resides in Stratford, Ontario. Millard is registered with the Commission to sell mutual fund securities. From February 1998 to March 1999 Millard was sponsored by CCI Capital Canada Limited ("CCI"), a mutual fund dealer, to sell mutual fund securities.
Amber Coast Resort Corporation
6.Amber Coast Resort Corporation ("Amber Coast") is a corporation organized pursuant to the laws of Turks and Caicos Islands.
7.Amber Coast created two offerings for its securities which relied on separate exemptions from the prospectus and registration requirements of the Act. No prospectus for Amber Coast was ever filed with or receipted by the Commission.
8.On September 1, 1998, CCI, entered into an agreement to "place" $200,000 (U.S.) worth of units of Amber Coast by September 30, 1998 and an additional $400,000 (U.S.) worth of units by November 30, 1998 in exchange for fees and use of a luxury villa.
9.Although CCI was never registered as a limited market dealer, CCI encouraged its sales representatives, including Millard, to sell units of Amber Coast to their clients.
10.Millard sold units of Amber Coast to two of his clients. In total, those clients invested $110,000 (U.S.) in Amber Coast.
11.CCI paid referral fees of 5% of the monies invested to Millard by way of commission cheques.
12.As he was in the business of trading in securities, Millard required registration to sell limited market products in order to sell units of the Amber Coast offering. Millard was not licensed to sell limited market products thus his sales to clients constituted trading without registration.
IV. POSITION OF THE RESPONDENT
13.Millard understood from representations made by the compliance personnel and management at CCI that he was entitled to sell units of Amber Coast to his clients. Millard relied upon these representations.
V. CONDUCT CONTRARY TO THE PUBLIC INTEREST
14.Millard agrees that his conduct in selling units of Amber Coast without registration contravened subsection 25(1) of the Act and was contrary to the public interest.
VI. TERMS OF SETTLEMENT
15.Millard agrees to the following terms of settlement:
a.pursuant to clause 1 of subsection 127(1) of the Act, the registration granted to Millard under Ontario securities law will be suspended for a period of 21 days from the date of the Commission's Order; and
b.pursuant to clause 6 of subsection 127(1) of the Act, Millard will be reprimanded.
VII. STAFF COMMITMENT
16.If this Settlement Agreement 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 order in respect of any conduct or alleged conduct of Millard in relation to the facts set out in Part III of this Settlement Agreement.
VIII. PROCEDURE FOR APPROVAL OF SETTLEMENT
17.The approval of the settlement as set out in the Settlement Agreement shall be sought at a public hearing before the Commission scheduled for such date as is agreed to by Staff andMillard in accordance with the procedures described herein and such further procedures as may be agreed upon between Millard and Staff.
18.If this Settlement Agreement is approved by the Commission, it will constitute the entirety of the evidence to be submitted respecting Millard in this matter and Millard agrees to waive his right to a full hearing and appeal of this matter under the Act.
19.If this Settlement Agreement is approved by the Commission, neither of the parties to this Settlement Agreement will make any statement that is inconsistent with this Settlement Agreement.
20.If, for any reason whatsoever, this settlement is not approved by the Commission, or the order set forth in Schedule "A" is not made by the Commission:
a.each of Staff and Millard will be entitled to proceed to a hearing of the allegations in the Notice of Hearing and related Statement of Allegations unaffected by the Settlement Agreement or the settlement negotiations;
b.the terms of the Settlement Agreement will not be raised in any other proceeding or disclosed to any person except with the written consent of Millard and Staff or as may be otherwise required by law; and
c.Millard further agrees that he will not raise in any proceeding the Settlement Agreement or the negotiation or process of approval thereof as a basis for any attack on the Commission's jurisdiction, alleged bias, appearance of bias, alleged unfairness or any other challenge that may otherwise be available.
21.If, prior to the approval of this Settlement Agreement by the Commission, there are new facts or issues of substantial concern, in the view of Staff, regarding the facts set out in Part III of this Settlement Agreement, Staff will be at liberty to withdraw from this Settlement Agreement. Notice of such intention will be provided to Millard in writing. In the event of such notice being given, the provisions of paragraph 20 in this part will apply as if this Settlement Agreement had not been approved in accordance with the procedures set out herein.
IX. DISCLOSURE OF SETTLEMENT AGREEMENT
22.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. Any obligations of confidentiality shall terminate upon approval of this settlement by the Commission. The terms of the Settlement Agreement will be treated as confidential by bothparties hereto until approved by the Commission and forever if for any reason whatsoever, the Settlement Agreement is not approved by the Commission.
X. EXECUTION OF SETTLEMENT AGREEMENT
23.This Settlement Agreement may be signed in one or more counterparts which shall constitute a binding agreement and a facsimile copy of any signature shall be as effective as an original signature.
DATED this 27th day of October, 2000.
SIGNED IN THE PRESENCE OF:
______________________________________________________________
(Please print name)Russell Millard
____________________________ ____________________________________
(Please print name) Michael Watson
Director of Enforcement on Behalf
of Staff of the Ontario Securities Commission