Order: In the Matter of Blackwood and Rose Inc. et al.

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

- AND -

IN THE MATTER OF
BLACKWOOD & ROSE INC., STEVEN ZETCHUS and JUSTIN KRELLER (also known as JUSTIN KAY)

ORDER
(Section 127)

    WHEREAS on January 29, 2013, the Ontario Securities Commission (the “Commission”) issued a Notice of Hearing (the “Notice of Hearing”) pursuant to sections 37, 127 and 127.1 of the Securities Act, R.S.O. 1990 c. S.5 as amended (the “Act”) accompanied by a Statement of Allegations of Staff of the Commission dated January 29, 2013 (the “Statement of Allegations”) with respect to Blackwood & Rose Inc. (“Blackwood”), Steven Zetchus (“Zetchus”) and Justin Kreller (“Kreller”) (collectively, the “Respondents”);

    AND WHEREAS the Notice of Hearing stated that a hearing would be held at the temporary offices of the Commission on February 19, 2013;

    AND WHEREAS on February 19, 2013, Staff attended the hearing and no one appeared on behalf of the Respondents;

    AND WHEREAS the Commission previously made a temporary order in connection with this proceeding on December 18, 2012 (the “Temporary Order”);

    AND WHEREAS on December 31, 2012, the Commission extended the Temporary Order to March 7, 2013 and adjourned the hearing to consider a further extension to March 6, 2013 at 10:00 a.m.;

    AND WHEREAS on February 19, 2013, Staff requested that a pre-hearing conference be scheduled in this matter and that the Temporary Order be extended to the day following the pre-hearing conference to permit the parties to make submissions on a further extension of the Temporary Order at the pre-hearing conference;

    AND WHEREAS on February 19, 2013, the Commission ordered that:

    (i)     the Temporary Order be extended to April 11, 2013 or until further order of the Commission;

    (ii)     the hearing date scheduled for March 6, 2013 to consider a further extension of the Temporary Order be vacated; and

    (iii)     the hearing be adjourned to April 10, 2013 at 10:00 a.m. for the purpose of conducting a prehearing conference and to consider a further extension of the Temporary Order;

    AND WHEREAS on April 10, 2013, Staff attended the hearing and no one appeared on behalf of the Respondents;

    AND WHEREAS a confidential pre-hearing conference was held;

    AND WHEREAS following the confidential pre-hearing conference, the hearing resumed and Staff requested (i) that the hearing be adjourned to a status hearing in May 2013; and (ii) that the Temporary Order be extended to the day following the status hearing to permit the parties to make submissions on a further extension of the Temporary Order at the status hearing;

    AND WHEREAS the Commission ordered that the Temporary Order be extended to May 21, 2013 and that the hearing be adjourned to May 17, 2013 at 10:00 a.m. for the purpose of conducting a status hearing and to consider a further extension of the Temporary Order;

    AND WHEREAS on May 17, 2013, Staff attended the hearing and no one appeared on behalf of the Respondents;

    AND WHEREAS Staff requested that the status hearing be converted into a confidential pre-hearing conference;

    AND WHEREAS a confidential pre-hearing conference was held and Staff made submissions;

    AND WHEREAS following the confidential pre-hearing conference, the hearing resumed and Staff requested (i) that the hearing be adjourned to a further confidential pre-hearing conference; and (ii) that the Temporary Order be extended to a date following the pre-hearing conference to permit the parties to make submissions on a further extension of the Temporary Order at the pre-hearing conference;

    AND WHEREAS the Commission ordered that (i) the Temporary Order be extended to June 20, 2013 or until further order of the Commission; (ii) the hearing be adjourned to June 18, 2013 at 3:30 p.m. for the purpose of conducting a confidential pre-hearing conference and to consider a further extension of the Temporary Order;

    AND WHEREAS on June 18, 2013, Staff attended the hearing and no one appeared on behalf of the Respondents;

    AND WHEREAS a confidential pre-hearing conference was held and Staff made submissions;

    AND WHEREAS following the confidential pre-hearing conference, the hearing resumed and Staff requested (i) that the hearing be adjourned to a status hearing; and (ii) that the Temporary Order be extended to a date following the status hearing to permit the parties to make submissions on a further extension of the Temporary Order at the status hearing;

    AND WHEREAS the Commission ordered that: (i) the Temporary Order be extended to August 14, 2013 or until further order of the Commission; and (ii) the hearing be adjourned to August 12, 2013 at 2:00 p.m., for the purpose of conducting a status hearing and to consider a further extension of the Temporary Order;

    AND WHEREAS by notice of motion dated August 2, 2013 (the “Notice of Motion”), Staff requested an order of the Commission, pursuant to Rule 11 of the Commission’s Rules of Procedure and section 5.1 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, that the hearing on the merits in this matter proceed in writing;

    AND WHEREAS the Respondents were served with the Notice of Motion and have not objected to this matter proceeding as a written hearing;

AND WHEREAS the Respondents have never participated in this hearing, although properly served with the Notice of Hearing, the Statement of Allegations and all subsequent orders made by the Commission;

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

    IT IS HEREBY ORDERED that pursuant to Rule 11 of the Commission’s Rules of Procedure and section 5.1 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, the hearing on the merits shall proceed as a written hearing in accordance with the following schedule:

    (i)     Staff shall file evidentiary briefs in the form of affidavits, as well as written submissions on the relevant facts and law, no later than August 26, 2013;

    (ii)     The Respondents shall file any responding materials by September 9, 2013;

    (iii)     Staff shall file any reply submissions by September 16, 2013; and

    (iv)     Staff and any participating Respondents will attend at a date appointed by the Panel after September 16, 2013 to answer questions, make submissions or make any necessary witnesses available for cross-examination;

    IT IS FURTHER ORDERED that the Temporary Order is extended to the conclusion of this proceeding, including the issuance of the Commission’s decision on sanctions and costs should a sanctions hearing be required following the conclusion of the hearing on the merits in this matter.

    

    DATED at Toronto this 12^th day of August, 2013.