R.S.O. 1990, c.S.5, AS AMENDED
- and -
IN THE MATTER OF MATTERHORN CAPITAL CORP.
AND PAUL BARNARD
WHEREAS it appears to the Ontario Securities Commission (the Commission) that:
1. Matterhorn Capital Corp. (Matterhorn)is registered under Ontario securities law as a Limited Market Dealer.
2. Matterhorn was granted registration on May 24, 2006. Matterhorn’s business plan was to raise capital for public and private companies on an exempt basis. The intended client base of the company would consist of accredited investors. Matterhorn has not commenced business operations.
3. Paul Barnard (Barnard) was granted registration as an officer in the category of Limited Market Dealer on May 24, 2006. He is the sole shareholder and registered officer of Matterhorn and the compliance officer of the firm.
4. On May 9, 2006, the United States Federal Trade Commission (FTC) filed a three count complaint alleging that Barnard and others, including corporations for which he served as owner, officer and director, had engaged in deceptive acts and practices in or affecting commerce, in breach of the laws of the United States.
5. The conduct at issue in the FTC complaint involves an alleged scheme in which telemarketing, the Internet and mass mailings were used to sell valueless business directories in the United States. At the time of the filing of the FTC complaint, the scheme was alleged to be taking in as much as one million dollars per month. The scheme was further alleged to have been operating since 2000.
6. On May 9, 2006, a temporary restraining order and asset freeze order (US Order) was made by the United States District Court for the Northern District of Illinois Eastern Division as against Barnard and others.
7. On May 24, 2006, the US Order was continued until completion of the trial on the merits or a further order of the court.
8. In Barnard’s application for registration as the sole trading officer, director and shareholder of Matterhorn, he disclosed previous employment with Datacom Marketing (Datacom), a call centre located at 1835 Yonge Street, Toronto, Ontario. He also disclosed that he worked under the supervision of Judy Neinstein (Neinstein). Both Datacom and Neinstein are named in the U.S. Order.
9. Barnard failed to disclose the FTC complaint and the U.S. Order issued against him in his application for registration, in contravention of MI 33-109 of the Securities Act.
10. On May 26, 2006, the Competition Bureau announced that criminal and other charges had been laid against Barnard and Neinstein in relation to their alleged activities in deceptive telemarketing activities over a 10-year period in Toronto.
A ND WHEREAS the Commission is of the opinion that it is in the public interest to make this Order;
AND WHEREAS, pursuant to subsection 127(5) of the Act, the Commission is of the opinion that the time required to conclude a hearing could be prejudicial to the public interest;
AND WHEREAS by Commission order made November 1, 2005 pursuant to section 3.5(3) of the Act, each of W. David Wilson, Susan Wolburgh Jenah and Paul M. Moore, acting alone, is authorized to make orders under section 127 of the Act;
IT IS HEREBY ORDERED that, pursuant to clause 1 of subsection 127(1) of the Act, the registration of Matterhorn and the registration of Paul Barnard be suspended; and
IT IS FURTHER ORDERED that, pursuant to subsection 127(6) of the Act, this Order shall take effect immediately and shall expire on the fifteenth day after its making unless extended by the Commission.
DATED at Toronto this 31 st day of May, 2006.
“Paul M. Moore”