IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, c.S.5, AS AMENDED
- AND -
IN THE MATTER OF
OF STAFF OF THE ONTARIO SECURITIES COMMISSION
Staff of the Ontario Securities Commission (“Staff”) make the following allegations:
Prior Cease Trade Order
3. Morrison holds the same positions with Momentas Corporation as she does with Momentas Realty.
4. Between July 2003 and June 2005, Momentas Corporation sold convertible debentures of Momentas Corporation (the “Momentas Corporation Convertible Debentures”) to residents of Ontario, British Columbia and Alberta. In selling its securities without a prospectus and without registration, Momentas Corporation purportedly relied upon the former OSC Rule 45-501 (now “National Instrument 45-106”).
5. Since June 2005, Morrison and others, including Momentas Corporation, have been prohibited from trading as a result of temporary orders imposed and extended by the Commission (the “Temporary Cease Trade Orders”) in proceedings commenced pursuant to section 127 of the Securities Act, R.S.O. c.S.5, as amended (the “Act”) in respect of the sale of Momentas Corporation Convertible Debentures (the “Momentas Corporation Commission Proceedings”).
6. On July 14, 2005, the Commission held a hearing to determine whether it was in the public interest to extend the Temporary Cease Trade Orders against Momentas Corporation until the conclusion of the hearing in the Momentas Corporation Commission Proceedings. At that time, the Commission concluded that Momentas Corporation “had been acting as a market intermediary and distributing securities without being registered”.
Sale of Momentas Realty Securities
9. Following the Temporary Cease Trade Orders, Momentas Realty began selling convertible debentures of Momentas Realty (the “Momentas Realty Convertible Debentures”) pursuant to an offering memorandum dated May 1, 2005 (the “Offering Memorandum”).
10. Momentas Realty states in its Offering Memorandum that it intends to raise $70,000,000 in aggregate proceeds from the sale of Momentas Realty Convertible Debentures for its stated business of “real estate development and investment”.
12. By her activities relating to the sale of the Momentas Realty Convertible Debentures, Morrison has carried out acts in furtherance of trades in securities of Momentas Realty without being registered in accordance with section 25 of the Act and has breached the Temporary Cease Trade Orders.
Conduct Contrary to the Public Interest
15. Staff reserve the right to make such further and other allegations as Staff may submit and the Commission may permit.
DATED AT TORONTO this 31 st day of March 2006.