Statement of Allegations: In The Matter of Linden Dornford

IN THE MATTER OF THE SECURITIES ACT,
R.S.O. 1990, c.S.5, AS AMENDED
AND
IN THE MATTER OF
LINDEN DORNFORD
STATEMENT OF ALLEGATIONS OF STAFF OF
THE ENFORCEMENT BRANCH OF THE
ONTARIO SECURITIES COMMISSION

Staff of the Enforcement Branch of the Ontario Securities Commission (the "Commission") allege that:

A BACKGROUND

A.1 The respondent Linden Dornford ("Dornford") is registered with the Commission as a mutual fund and limited market salesperson. Money Growth FinancialServices Inc. ("Money Growth") was a registered mutual fund a limited market dealer until it surrendered its registration to the Commission in February, 1997.Dornford was the President, a director and, indirectly, the controlling shareholder of Money Growth.

B MONEY GROWTH ACCOUNTS

B.1 At all material times Money Growth maintained three relevant accounts at the Bank of Montreal; namely: an operating account, a trust account and a trustclearing account. The operating account was used for Money Growth's general business purposes.

B.2 In the ordinary course, funds received from Money Growth's clients for investment in mutual funds were deposited to the Money Growth trust account.These client funds were then transferred to the Money Growth trust clearing account. From the clearing account, payments were made to mutual fundmanagement companies for the purpose of settling Money Growth's clients' mutual fund investments.

C MISUSE OF TRUST FUNDS

C.1 Contrary to the obligations described in paragraph B.3 above, on numerous occasions between January, 1995 and December, 1996, Dornford instructedrepresentatives of the Bank of Montreal to transfer clients funds on deposit in the Money growth trust and trust clearing accounts to the Money Growthoperating account. Dornford transferred these assets to satisfy amounts owing from time to time by Money Growth to the Bank of Montreal pursuant to itsoperating line of credit or to cover overdrafts in the operating account.

C.2 By reasons of the deficiency in the Money Growth trust accounts, assets entrusted to Money Growth by its clients were exposed to loss. By January, 1997,there was a deficiency of approximately $372,000 in the Money Growth trust accounts.

D. OTHER ALLEGATIONS

D.1 Such further allegations as counsel may advise and the Commission may permit.

DATED at Toronto, this 6th day of February, 1998.