Proceedings

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

AND

IN THE MATTER OF
NUCAP INVESTMENTS INC.
AND
WILLIAM A. DRESSING

STATEMENT OF ALLEGATIONS OF STAFF OF THE
ONTARIO SECURITIES COMMISSION

 

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

BACKGROUND
 
1.       Nucap Investments Inc. ("Nucap") was incorporated in Ontario on December 18, 1987 and most recently had its head office in Markham, Ontario.
 
2. Nucap has been registered as a mutual fund dealer under the Securities Act, R.S.O. 1990, c. S.5, as amended (the "Act") since May 25, 1988.
 
3. William A. Dressing is the president, secretary and sole director of Nucap.
 
4. William A. Dressing was a registered salesperson under the Act by virtue of being a trading officer of Nucap.
 
NUCAP'S FAILURE TO FILE FINANCIAL STATEMENTS
 
5. On September 25, 1989, Nucap was requested to file certain financial information on a monthly basis as a result of staff's concerns with Nucap's financial statements.
 
6. Nucap filed financial information on a monthly basis until 1992.
 
7. Nucap last submitted audited financial statements with the Ontario Securities Commission (the "Commission") for the fiscal year ending November 30, 1993.
 
8. On several occasions prior to and including November 24, 1994, Nucap was advised by staff of the Commission that Nucap had failed to file the financial information required on a monthly basis.
 
9. Nucap failed to submit audited financial statements for the fiscal years ending November 30, 1994 and November 30, 1995.
 
SUSPENSION OF NUCAP'S REGISTRATION
 
10. Staff of the Commission suspended Nucap's registration as of April 25, 1996 as a result of Nucap's failure to file financial statements and a Statement C of Form 9 with the Commission.
 
11. Mutual fund dealers are required to file audited financial statements with the Commission within 90 days after the end of its financial year pursuant to sections 139 to 142 of Regulation 1015.
 
12. William A. Dressing and Nucap were informed of the suspension by letter from staff of the Commission dated May 15, 1996.
 
13. William A. Dressing did not inform any of the eight salespersons sponsored by Nucap of Nucap's suspension.
 
MUTUAL FUND SALES AFTER APRIL 25, 1996
 
14. William A. Dressing and the salespersons sponsored by Nucap sold mutual funds to the public subsequent to Nucap's suspension.
 
15. Nucap's salespersons stopped selling mutual funds to their clients when they learned of Nucap's suspension on or before April 28, 1997.
 
16. After Nucap's suspension on April 25, 1996, Nucap processed approximately $1.5 million in mutual fund sales.
 
REDEMPTIONS OF MUTUAL FUNDS WITHOUT CLIENT'S INSTRUCTIONS
 
17. On September 18, 1996, William Dressing and Nucap approved the redemption of two mutual funds belonging to a Nucap client without the client's instructions.
 
18. Nucap has not paid $56,100 owing to the Nucap client pursuant to the redemptions of the mutual funds.
 
CONDUCT CONTRARY TO THE PUBLIC INTEREST
 
19. The conduct of Nucap and William A. Dressing in selling mutual funds after Nucap's suspension was contrary to the public interest and contrary to section 25(1) of the Act.
 
20. Nucap and William A. Dressing have failed to deal fairly, honestly and in good faith with Nucap's salespersons and clients.
 
21. Such other allegations as Staff may make and the Commission may permit.
 
DATED at Toronto this 24th day of July, 1997.