R.S.O. 1990, c. S.5, as amended
IN THE MATTER OF
HILRY HILTON NEALE
WHEREAS IT APPEARS to the Ontario Securities Commission (the"Commission") that:
1. Hilry Hilton Neale ( "Neale") is an individual who resides in the City ofBurlington, Ontario. On February 29, 1988, Neale registered with theCommission as a Mutual Fund Dealer (Limited Market Dealer Conditional)through W.H. Stuart Mutual Ltd. (" W.H. Stuart"). Neale submitted a "UniformApplication for Registration/Approval" ("Form 4"). Neale continues to beregistered with the Commission as a Mutual Fund Dealer (Limited Market DealerConditional) through W.H. Stuart, his sponsoring corporation.
2. Neale is registered to sell mutual funds through W.H. Stuart. Neale is alsoregistered to sell insurance and contracts directly through Zurich Canada andThe Equitable Life Insurance Company of Canada. Neale operated under thename N.Y.N Financial Services ("NYN"). However, NYN was never registered orincorporated and has been inactive since 1995.
3. Since 1988, Neale has made an annual application to the Commission to renewhis registration. Throughout this time, Neale's registration continued to besponsored by W.H. Stuart. Pursuant to the Form 4, Neale was required to notifythe Commission in writing of any material change in the information originallyprovided in the Form 4. Based on the ten applications for renewal submitted byNeale since 1988, his registration was renewed every year and expires on April30, 1999.
4. Since 1990, Neale has been convicted of the following offences, contrary to theCriminal Code of Canada, R.S.C. 1985, c.C-46 ("Criminal Code"): on May 29,1990, Neale plead guilty to assault with a weapon and was ordered to pay a fineof $500; on October 20, 1992, Neale plead guilty to conspiracy to commit anindictable offence and was ordered to pay a fine of $1,300; and, on October 23,1996, Neale plead guilty to conspiracy to violate United States Immigration Lawand was ordered to pay a fine of $2,500.
5. Between January 10, 1996, and January 7, 1998, Neale was charged with threecounts of fraud over $5,000 and one count of fail to appear, contrary to theCriminal Code.
6. Mr. Roy Bennett is the victim with respect to two of the counts of fraud over$5,000. It is alleged that on February 1, 1995, Neale, through NYN, entered intoa verbal business arrangement with Mr. Bennett. Mr. Bennett gave Neale acheque for $53,600 to be invested in Mackenzie Financial on the understandingthat the investment was to mature on August 24, 1995 and that the principal andinterest due on that date was $58,000. However, on the maturity date, the fundswere not forthcoming from Neale. Mr. Bennett met with Neale on severaloccasions to discuss the payment of the principal and interest. Eventually,Neale admitted that the funds were never invested and he was unable to repaythe victim. Neale informed the victim that he had used the money for his ownuse.
7. It is also alleged that on May 11, 1995, Neale approached Mr. Bennett withrespect to a second investment opportunity involving a computer sales deal. Mr.Bennett agreed and provided Neale with a cheque for $20,000 on theunderstanding that the principal and interest would be paid within 30 days. Mr.Bennett has not received any principal or interest from this investment.
8. The trial of the offences involving Mr. Bennett is scheduled to be heard in theOntario Court (General Division) on November 23, 1998. To date, Mr. Bennetthas received a partial restitution of $7,500 with respect to the funds owing tohim.
9. On January 7, 1998, Neale was charged with a third count of fraud over $5,000.On April 29, 1997, Mrs. Gloria McCalla, the victim, gave Neale $30,000 to investfor her through W.H. Stuart. It was agreed that the term of the investment was tohave been for 90 days and upon maturity, the victim would have collected$5,000 in interest. On the maturity date, Mrs. McCalla did not receive theprincipal or interest. Neale advised her that he did not have the money and thathe was not able to provide any details with respect to how the money had beeninvested.
10. The trial of the offence involving Mrs. McCalla is scheduled to be heard in theOntario Court (General Division) on December 15, 1998. To date, Mrs. McCallahas not received any restitution with respect to the funds owing to her.
11. Neale has never disclosed to the Commission the existence of his three criminalconvictions and the fact that he has four outstanding criminal charges, contraryto Form 4.
12. Neale's current business activities continue to involve the sale of securitiesresulting in the receipt of monies from investors.
AND WHEREAS the Commission is of the opinion that the length of timerequired for a hearing could be prejudicial to the public interest;
AND WHEREAS by authorization order made April 21, 1998, pursuant tosubsection 3(2) of the Act, the Commission authorized each of David A. Brown, John A.Geller and Morley P. Carscallen, acting alone to exercise the powers of theCommission under the Act, subject to subsection 3(3) of the Act, to make orders undersection 127 of the Act;
IT IS THEREFORE ORDERED, pursuant to paragraph 1 of subsection 127(1) ofthe Act and Ontario Securities policy 4.2, that Neale's registration be suspended for aperiod of 15 days from the date of the Order;
AND IT IS ORDERED that pursuant to paragraph 2 of subsection 127(1) of theAct that all trading by Neale cease for a period of 15 days from the date of the Order.
October 20th, 1998.