Statement of Allegations: In the Matter of David Singh et al.

Statement of Allegations

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

AND

IN THE MATTER OF DAVID SINGH, JEFFREY LIPTON,
AND INFINITYINVESTMENT COUNSEL LTD.

STATEMENT OF ALLEGATIONS OF STAFF OF THE ENFORCEMENT BRANCH OF THE
ONTARIO SECURITIES COMMISSION

The Respondents

     

  1. The respondent Infinity Investment Counsel Ltd. ("Infinity Investment Counsel") is acorporation organized pursuant to the laws of Canada. At all material times, InfinityInvestment Counsel was the portfolio manager of Infinity Canadian Fund and InfinityIncome and Growth Fund (the "Infinity Funds") and was registered with the OntarioSecurities Commission (the "Commission"), pursuant to the Securities Act (the "Act"), asinvestment counsel and portfolio manager.

     

  2. The respondent David Singh ("Singh") is an individual who resides in the Province ofOntario. Singh was at all material times:

       

    • the controlling shareholder of Infinity Investment Counsel;

       

    • a director of Infinity Investment Counsel; and

       

    • registered with the Commission pursuant to the Act to sell securities.

 

  • The respondent Jeffrey Lipton ("Lipton") is an individual who resides in the Province ofOntario. Lipton was at all material times:

       

    1. a director, the president and chief executive officer of Infinity InvestmentCounsel; and

       

    2. registered with the Commission pursuant to the Act as a portfolio manager andinvestment counsel of Infinity Investment Counsel.

    The Facts

       

    1. A Notice of Hearing and Statement of Allegations was issued by the Commission onJanuary 12, 1999 against Singh, Lipton and Infinity Investment Counsel. The Statementof Allegations alleged that Singh, Lipton and Infinity Investment Counsel caused orpermitted an investment by the Infinity Funds which was contrary to the public interestand which contravened the Act, Regulation and National Policy 39.

       

    2. A settlement agreement dated January 12, 1999 was entered into by Staff and therespondents in respect of the allegations referred to in paragraph 4 above. A hearing wasscheduled for January 19, 1999 for the Commission to consider whether or not to approvethe settlement agreement.

       

    3. On January 19, 1999, the Commission approved the settlement agreement and made anOrder against the respondents pursuant to section 127 of the Act.

       

    4. On January 20, 1999, the management team of Infinity mutual funds published anadvertisement in national and local newspapers (the "advertisement").

       

    5. The advertisement made statements which the respondents knew were consideredmisleading by Staff of the Commission as a result of discussions held in settlementnegotiations. The respondents themselves knew or ought to have known that theadvertisement was in fact misleading.

       

    6. The advertisement also made statements inconsistent with the settlement agreement.These inconsistencies constitute a contravention of the provisions of the settlementagreement.

    Conduct Contrary to the Public Interest

       

    1. The conduct of Singh, Lipton and Infinity Investment Counsel in permitting publicationof the advertisement was contrary to the public interest for the following reasons:

       

    1. the advertisement was misleading;

       

    2. the advertisement contravened an agreement reached between Singh, Lipton andInfinity Investment Counsel and Staff; and

       

    3. the advertisement contravened section 16 of National Policy 39 as it was amisleading sales communication.

     

    1. Such other allegations as Staff may make and the Commission may permit.

     

    DATED at Toronto, this 10th day of February, 1999.