Proceedings

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

Staff of the Enforcement Branch of the Ontario Securities Commission ("Staff") make the following allegations:

BACKGROUND

1. Dean Albrecht ("Albrecht") is a financial marketing consultant who currently resides in the state of Florida in the United States of America. Albrecht formerlywas registered with the Ontario Securities Commission (the "Commission") to sell mutual fund securities and limited market products.

2. David Barnsdale ("Barnsdale") is registered with the Commission to sell mutual fund securities and limited market products. At all material times, Barnsdalewas employed by CMG-Worldsource Financial Services Inc.

3. Roch Beaulieu ("Beaulieu") is registered with the Commission to sell mutual fund securities and limited market products. At all material times, Beaulieu wasemployed by Money Concepts Group Capital Corp.

4. Mary Dawn Davy ("Davy") is registered with the Commission to sell mutual fund securities and limited market products. At all material times, Davy wasemployed by Multi Mutual Inc. and was the manager for the branch located in Brantford, Ontario.

5. Ahsan Khan ("Khan") is registered with the Commission to sell mutual fund securities. At all material times Khan was employed by Fortune Investment Corp.

6. Mark Miller ("Miller") is registered with the Commission to sell securities. At all material times, Miller was employed by Fortune Financial Corp.

7. James Schofield ("Schofield") is registered with the Commission to sell mutual fund securities and limited market products. At all material times, Schofieldwas employed by Planvest Financial Corporation and was the manager of the branch located in Ajax, Ontario.

8. Ashton So ("So") is registered with the Commission to sell mutual fund securities and limited market products. At all material times, So was employed byCMG-Worldsource Financial Services Inc.

9. Wayne Stephenson ("Stephenson") is registered with the Commission to sell mutual fund securities and limited market products. At all material times,Stephenson was employed by Berkshire Investment Group Inc. and was the manager of the branch located in Barrie, Ontario.

10. Ian Yeo ("Yeo") is registered with the Commission to sell securities. At all material times, Yeo was employed by TD Securities Inc.

11. TD Securities Inc. ("TD Securities") is registered with the Commission as, inter alia, a broker dealer.

FACTUAL ALLEGATIONS

12. In or about early 1996, Albrecht began to offer co-authorship in a book on financial planning to salespersons in the financial industry. Albrecht presentedthe book as a marketing tool which participants could give to prospects and clients. Albrecht offered and/or sold participants co-authorship in the book inexchange for their review of the manuscript he had prepared.

13. Barnsdale, Beaulieu, Davy, Khan, Miller, Schofield, So, Stephenson and Yeo agreed to become co-authors of the book. In furtherance of that agreement,these individuals:

(a) knew or ought to have known that other salespersons in the industry had agreed to be co-authors of the book;

(b) drafted or approved a biography to be included in the book naming them as a co-author;

(c) knew or ought to have known that identical or nearly identical versions of the book would be produced naming each other participant as the sole co-authoralong with Albrecht;

(d) accepted delivery of copies of the book naming them as the sole co-author along with Albrecht; and

(e) distributed the book to existing and/or potential clients when they knew or ought to have known that the book contained a misrepresentation as to theirauthorship.

14. In addition to the conduct outlined in paragraph 13 above, Barnsdale, So and Yeo each agreed to have their name placed on the cover of their copy of thebook along with Albrecht's name as co-author. Furthermore, So distributed copies of the book after receiving correspondence from Staff of the Commissionexpressing concern about the book and correspondence from the president of his employer advising him to cease distributing the book.

15. With the exception of Yeo, none of the individuals identified in paragraph 13 sought approval from his or her branch manger or the compliance departmentof his or her employer to participate in the book project or to distribute the book to existing and/or potential clients.

16. TD Securities failed to adequately supervise Yeo by authorizing him to distribute to existing and potential clients a book naming him as the sole co-authorwhen TD Securities knew or ought to have known that the identification of Yeo as the sole co-author was a misrepresentation.

CONDUCT CONTRARY TO THE PUBLIC INTEREST

17. The conduct of Barnsdale, Beaulieu, Davy, Khan, Miller, Schofield, So, Stephenson and Yeo was contrary to the public interest in that:

(a) these individuals participated in a marketing tool designed to mislead the public;

(b) these individuals distributed to existing and/or potential clients a book containing a misrepresentation as to their role in authorship;

(c) these individuals distributed a sales communication which included an untrue and misleading statement of fact; and

(d) these individuals engaged in conduct unbecoming a registrant with the Commission.

18. Contrary to the public interest, TD Securities failed to have adequate compliance procedures in place and to adequately supervise its sales representative byauthorizing Yeo to distribute to existing and potential clients a book containing a misrepresentation as to his authorship.

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

 

DATED at Toronto this 31st day of October, 1997.