IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, c. S.5, AS AMENDED
IN THE MATTER OF
ALEXIS CAPITAL ADVISORS INC.
STATEMENT OF ALLEGATIONS OF STAFF OF THE ONTARIO SECURITIES COMMISSION
1. The respondent Alexis Capital Advisors Inc. ("Alexis") is a corporation registeredpursuant to Ontario securities law as a mutual fund dealer and limited market dealer.Alexis' financial year ends on January 31.
Late Delivery of 1998 Financial Statements
2. Section 139 of the Regulation ("the Regulation") under the Securities Act ("the Act")provides that every mutual fund dealer shall deliver to the Commission within ninety daysafter the end of its financial year, a copy of its audited financial statements for the financialyear.
3. Pursuant to section 107 of the Regulation, Alexis is required at all times to maintainprescribed minimum free capital. Section 141 of the Regulation requires that Alexisdeliver to the Commission, within ninety days after the end of its financial year, an auditedreport of its free capital prepared in accordance with Statement C of Form 9 of theRegulation.
4. Alexis' financial statements and audited report of free capital for the year ending January31, 1998, were due on or before April 30, 1998. Alexis delivered those documents onJune 30, 1998.
Failure to Maintain Minimum Free Capital
5. Alexis' report of free capital for the year ending January 31, 1998, disclosed a capitaldeficiency in the amount of $3,478.00. This capital deficiency was rectified as at May 31,1998.
Late or Missing Monthly Filings
6. On July 15, 1998, pursuant to section 31 of the Act, the Director required that Alexisdeliver to the Commission, within three weeks of each month end,
(a) unaudited, interim financial statements at month end prepared in accordance withgenerally accepted accounting principles;
(b) a calculation of minimum free capital at month end;
(c) a calculation of adjusted liabilities prepared in accordance with Statement C ofForm 9 of the Regulation; and
(d) a reconciliation of all trust bank accounts.
7. The monthly filings referred to in paragraph 10 above, in respect of July 1998 toDecember 1998 inclusive, were all delivered on February 4, 1999.
8. The monthly filings in respect of February, March and April of 1999 were delivered onJune 8, 1999.
9. The monthly filings in respect of May and June of 1999 were delivered as required.
1999 Financial Statements
10. Alexis' audited financial statements for the year ending January 31, 1999, due April 30,were not delivered by that time. Staff of the Commission attempted to contact thePresident of Alexis on May 5 and left a message requesting a return call. The call was notreturned. On May 13, Staff called the President of Alexis. At that time, Alexis' Presidentadvised Staff that the financial statements might already have been delivered to theCommission. They had not.
11. On May 18, Alexis delivered draft unaudited financial statements. On May 26, Alexisdelivered draft audited statements. On June 3, Alexis delivered its audited financialstatements. Those financial statements disclosed a capital deficiency of $1,791.00.
DATED at Toronto, this 25th day of August, 1999.