Order: In the Matter of Franklin Danny White et al.

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

-AND-

IN THE MATTER OF
FRANKLIN DANNY WHITE, NAVEED AHMAD QURESHI,
WNBC THE WORLD NETWORK BUSINESS CLUB LTD.,
MMCL MIND MANAGEMENT CONSULTING,
CAPITAL RESERVE FINANCIAL GROUP, and
CAPITAL INVESTMENTS OF AMERICA

ORDER
(Sections 127 and 127.1 of the Securities Act)


 

WHEREAS on February 7, 2008, a Statement of Allegations and a Notice of Hearing were issued pursuant to sections 127 and 127.1 of the Securities Act, R.S.O. 1990, c. S.5, as amended (the “Act”), in respect of Franklin Danny White (“White”), Naveed Ahmad Qureshi (“Qureshi”), WNBC The World Network Business Club Ltd. (“WNBC”), MMCL Mind Management Consulting (“MMCL”), Capital Reserve Financial Group (“Capital Reserve”), and Capital Investments of America (“Capital Investments”) (collectively, the “Respondents”);

AND WHEREAS the Commission conducted the hearing on the merits in this matter on March 23, 24, 25 and 27, 2009;

AND WHEREAS the Commission issued its Reasons and Decision on the merits in this matter on February 10, 2010 (the “Merits Decision”);

AND WHEREAS the Commission is satisfied that the Respondents have not complied with Ontario securities law and have not acted in the public interest, as outlined in the Merits Decision;

AND WHEREAS in the Merits Decision the Commission found that the amount of funds outstanding to investors is US$ 340,164 and CDN$ 431,085, for a combined total of just more than CDN$ 800,000;

AND WHEREAS one investor commenced a civil proceeding against White and WNBC, and the Statement of Claim dated April 17, 2007 states, among other things, that this investor advanced CDN$ 300,000 to White, WNBC and MMCL;

AND WHEREAS this investor has obtained a judgment, dated October 4, 2007, from the Ontario Superior Court of Justice in the amount of CDN$ 356,219.18 against White and WNBC (the “Superior Court Judgment”) and CDN$ 300,000 of this amount represents the return of funds to the investor;

AND WHEREAS the Commission conducted a hearing with respect to sanctions and costs on June 4, 2010 (the “Sanctions and Costs Hearing”);

AND WHEREAS the Commission has taken into account the amount of total funds outstanding to investors (CDN$ 800,000) and the Superior Court Judgment (which compensates one investor who advanced CDN$ 300,000 to White, WNBC and MMCL), and the Commission has determined that the sum of CDN$ 500,000 should be disgorged;

AND WHEREAS but for the Superior Court Judgment the Commission would have ordered the full amount of CDN$ 800,000 to be disgorged;

AND WHEREAS the Commission has taken into account the timing of the coming into force of the administrative penalty provision (clause 9 of subsection 127(1) of the Act, which came into force on April 7, 2003) and the Commission has determined that each of White and Qureshi shall pay an administrative penalty of $50,000 and each of WNBC, MMCL, Capital Reserve and Capital Investments shall pay an administrative penalty of $40,000;

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

IT IS HEREBY ORDERED:

  1. pursuant to clause 2 of subsection 127(1) of the Act, all of the Respondents shall cease trading permanently, with the exception that each of White and Qureshi are permitted to trade securities for the account of their respective registered retirement savings plans (as defined in the Income Tax Act (Canada)) in which they and/or their respective spouses have sole legal and beneficial ownership, provided that:
    1. the securities traded are listed and posted for trading on the Toronto Stock Exchange, the New York Stock Exchange or NASDAQ (or their successor exchanges) or are issued by a mutual fund that is a reporting issuer;
    2. they do not own legally or beneficially (in the aggregate, together with their respective spouses) more than one percent of the outstanding securities of the class or series of the class in question; and
    3. they carry out any permitted trading through a registered dealer and through trading accounts opened in their respective names only (and they must close any trading accounts that are not in their respective names only);
  2. pursuant to clause 2.1 of subsection 127(1) of the Act, the acquisition of any securities by all of the Respondents is prohibited permanently, except in the case of White and Qureshi, to allow the trading in securities permitted by and in accordance with paragraph (a) of this Order;
  3. pursuant to clause 3 of subsection 127(1) of the Act, any exemptions in Ontario securities law do not apply permanently to all of the Respondents;
  4. pursuant to clause 6 of subsection 127(1) of the Act, White and Qureshi are reprimanded;
  5. pursuant to clause 7 of subsection 127(1) of the Act, White and Qureshi shall immediately resign all positions they may hold as a director or officer of any issuer;
  6. pursuant to clause 8 of subsection 127(1) of the Act, White and Qureshi are prohibited permanently from becoming or acting as a director or officer of any issuer;
  7. pursuant to clause 8.1 of subsection 127(1) of the Act, White and Qureshi are prohibited permanently from becoming or acting as a director or officer of any registrant;
  8. pursuant to clause 9 of subsection 127(1) of the Act, each of WNBC, MMCL, Capital Reserve and Capital Investments shall pay an administrative penalty of $40,000, to be allocated by the Commission in accordance with paragraph (k) of this Order;
  9. pursuant to clause 9 of subsection 127(1) of the Act, each of White and Qureshi shall pay an administrative penalty of $50,000, to be allocated by the Commission in accordance with paragraph (k) of this Order;
  10. pursuant to clause 10 of subsection 127(1) of the Act, the Respondents shall disgorge to the Commission, on a joint and several basis, $500,000.00, to be allocated by the Commission in accordance with paragraph (k) of this Order;
  11. the amounts referred to in each of paragraphs (h) to (j) inclusive of this Order shall be allocated by the Commission to or for the benefit of third parties, including investors who lost money as a result of investing in the investment scheme that was the subject matter of this proceeding, in accordance with subsection 3.4(2)(b) of the Act; and
  12. pursuant to section 127.1 of the Act, the Respondents shall pay, on a joint and several basis, $169,651.25 in costs to the Commission.

 

Dated at Toronto, Ontario this 29th day of September 2010.

 

 

" Patrick J. LeSage "
Patrick J. LeSage		                    " Carol S. Perry "
Carol S. Perry