Proceedings

PDF Version
PDF Version

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

–AND–

IN THE MATTER OF DEVENDRANAUTH MISIR

SETTLEMENT AGREEMENT

PART I – INTRODUCTION


1. The Ontario Securities Commission (the “Commission”) will issue a Notice of Hearing to announce that it will hold a hearing to consider whether, pursuant to section 127 of the Securities Act, R.S.O. 1990, c. S-5, as amended (the “Act”), it is in the public interest for the Commission to make certain orders in respect of Devendranauth Misir (the “Respondent”).

PART II – JOINT SETTLEMENT RECOMMENDATION


2. Staff of the Commission (“Staff”) agree to recommend settlement of the proceeding commenced by Notice of Hearing dated July 11, 2005 (the “Proceeding”) against the Respondent according to the terms and conditions set out in Part VI of this Settlement Agreement. The Respondent agrees to the making of an order in the form attached as Schedule “A”, based on the facts set out below.

PART III – AGREED FACTS


3. For this proceeding, , the Respondent agrees with the facts as set out in Part III of this Settlement Agreement.

4. John Illidge (“Illidge”) was a Director of Rampart Mercantile Inc. (“Mercantile”) from December, 1999 until his resignation on September 19, 2001. Mercantile was the parent corporation of Rampart Securities Inc. (“Rampart”), a Toronto brokerage house. Rampart was a member of the IDA until its membership was terminated in on January 21, 2002.

5. The Respondent is a Toronto businessman and a lawyer practising at the firm of Misir & Co. He is not, and has never been, registered with the Commission in any capacity. In February, 2001, VP and SP (the “Lottery Winners”) won over $19 million in a lottery. As a result of their windfall, the Lottery Winners anticipated that they would require the assistance and advice of a lawyer. Through a friend, they were referred to the Respondent. The Lottery Winners retained the Respondent as their counsel very shortly after learning that they held the winning ticket and before they collected their prize.

6. After the prize was collected, the Respondent introduced the Lottery Winners to Illidge and to Rampart, where they opened brokerage accounts. Thereafter, for a period of several months, the Respondent acted as an “adviser” (as that word is defined in section 1(1) of the Act) to the Lottery Winners, giving advice to them with respect to the buying and selling of securities. As an adviser, the Respondent was required to be registered under section 25(1)(c) of the Act unless his advising was “solely incidental” to his “principal occupation” as a lawyer under section 34 of the Act. The Respondent’s work as an adviser to the Lottery Winners did not fit within the language of the exemption and, as a result, the exemption available under section 34 of the Act did not apply

PART IV – CONDUCT CONTRARY TO ONTARIO SECURITIES LAW


7. The Respondent acknowledges the Commission’s jurisdiction in this matter and its authority to make the Order referred to herein.

8. By engaging in the conduct described above, the Respondent has breached Ontario securities law by contravening section 25(1)(c) of the Act.

PART V – RESPONDENT’S POSITION



9. The Respondent requests that the settlement hearing panel consider the following mitigating circumstances:
  1. A civil action commenced by the Lottery Winners has been dismissed by Order of the Superior Court of Justice for Ontario, which order was made on consent without costs.
  2. No issue is raised by the Commission with the nature or quality of the Respondent’s advice.

PART VI – TERMS OF SETTLEMENT


10. The Respondent agrees to the terms of settlement listed below.

11. The Commission will make an order pursuant to section 127(1) and section 127.1 as follows:
  1. The Commission will make an Order under section 127 of the Act that:
    1. Misir shall be reprimanded;
    2. Misir shall be prohibited for a period of one year from becoming or acting as a director or officer of a registrant;
    3. Misir shall be prohibited for a period of one year from becoming or acting as a registrant; and
    4. Misir shall pay an administrative penalty in the amount of $3,000; and,
  2. The Commission will make an Order under section 127.1 of the Act that:
    1. Misir shall pay costs of the investigation in the amount of $3,000.
PART VII – STAFF COMMITMENT


12. If the Commission approves this Settlement Agreement, Staff will not commence any proceeding under Ontario securities law in relation to the facts set out in Part III of this Settlement Agreement or in relation to any issue alleged in the Notice of Hearing dated July 11, 2005, subject to the provisions of paragraph 13 below.

13. If the Commission approves this Settlement Agreement and the Respondent fails to comply with any of the terms of the Settlement Agreement, Staff may bring proceedings under Ontario securities law against the Respondent. These proceedings may be based on, but are not limited to, the facts set out in Part III of this Settlement Agreement as well as the breach of the Settlement Agreement.

PART VIII – PROCEDURE FOR APPROVAL OF SETTLEMENT


14. The parties will seek approval of this Settlement Agreement at a public hearing before the Commission scheduled for February 24, 2009, or on another date agreed to by Staff and the Respondent, according to the procedures set out in this Settlement Agreement and the Commission’s Rules of Practice.

15. Staff and the Respondent agree that this Settlement Agreement will form all of the agreed facts that will be submitted at the settlement hearing on the Respondent’s conduct, unless the parties agree that additional facts should be submitted at the settlement hearing.

16. If the Commission approves this Settlement Agreement, the Respondent agrees to waive all rights to a full hearing, judicial review or appeal of this matter under the Act.

17. If the Commission approves this Settlement Agreement, neither party will make any public statement that is inconsistent with this Settlement Agreement or with any additional agreed facts submitted at the settlement hearing.

18. Whether or not the Commission approves this Settlement Agreement, the Respondent will not use, in any proceeding, this Settlement Agreement or the negotiation or process of approval of this agreement as the basis for any attack on the Commission’s jurisdiction, alleged bias, alleged unfairness, or any other remedies or challenges that may otherwise be available.

PART IX – DISCLOSURE OF SETTLEMENT AGREEMENT


19. If the Commission does not approve this Settlement Agreement or does not make the order attached as Schedule “A” to this Settlement Agreement:
  1. this Settlement Agreement and all discussions and negotiations between Staff and the Respondent before the settlement hearing takes place will be without prejudice to Staff and the Respondent; and
  2. Staff and the Respondent will each be entitled to all available proceedings, remedies and challenges, including proceeding to a hearing of the allegations contained in the Statement of Allegations. Any proceedings, remedies and challenges will not be affected by this Settlement Agreement, or by any discussions or negotiations relating to this agreement.
20. Both parties will keep the terms of the Settlement Agreement confidential until the Commission approves the Settlement Agreement. At that time, the parties will no longer have to maintain confidentiality. If the Commission does not approve the Settlement Agreement, both parties must continue to keep the terms of the Settlement Agreement confidential, unless they agree in writing not to do so or if required by law.

PART X – EXECUTION OF SETTLEMENT AGREEMENT


21. The parties may sign separate copies of this agreement. Together, these signed copies will form a binding agreement.

22. A fax copy of any signature will be treated as an original signature.


DATED at Toronto, this 23rd day of February, 2009.


“Devendranauth Misir”
Respondent
 
“Omar Rambhajan”
Witness
     
“Peggy Dowdall-Logie”
Peggy Dowdall-Logie
Executive Director
 
 
 



SCHEDULE ‘A’

IN THE MATTER OF THE SECURITIES ACT,
R.S.O. 1990 c.S.5, as amended (the “Act”)

- and –

IN THE MATTER OF
DEVENDRANAUTH MISIR (“Misir”)

ORDER
(Sections 127 and 127.1)


WHEREAS on July 11, 2005, the Ontario Securities Commission (the “Commission”) issued a Notice of Hearing pursuant to sections 127 and 127.1 of the Act in respect of Misir and others;

AND WHEREAS Misir and Staff of the Commission entered into a settlement agreement dated February ____, 2009 (the “Settlement Agreement”) in which they agreed to a settlement of the proceeding subject to the approval of the Commission;

AND UPON reviewing the Settlement Agreement and the Statement of Allegations of Staff of the Commission, and upon hearing the submissions from counsel to Misir and from counsel for Staff of the Commission;

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

IT IS HEREBY ORDERED THAT:

(1) the Settlement Agreement attached to this Order is hereby approved;

(2) pursuant to section 127 of the Act:
(a) Misir shall be reprimanded;

(b) Misir shall be prohibited for a period of one year from becoming or acting as a director or officer of a registrant;

(c) Misir shall be prohibited for a period of one year from becoming or acting as a registrant; and,

(d) Misir shall pay an administrative penalty in the amount of $3,000 and,
(3) pursuant to section 127.1 of the Act:
(a) Misir shall pay costs of the investigation in the amount of $3,000.


__________________________________     ____________________________________



                              ____________________________________



DATED at Toronto, February ___, 2009