A panel of the Ontario Securities Commission has approved a settlement agreement between OSC staff and Brian Anderson concerning the sale of “desks” on the Flat Electronic Data Interchange, also known as F.E.D.I. in breach of the Ontario Securities Act.

This matter arose on June 4, 2003 when commission staff were notified of a seminar to be held that evening at a Toronto area hotel. Staff attended the meeting where persons who were present were invited to invest US$125,000 in F.E.D.I.

F.E.D.I. was described as a scriptural based trust that operated an electronic data interchange. The following day, June 5, 2003, the Commission issued and served a temporary order cease trading any investment in F.E.D.I. and prohibiting the distribution of the related sales literature. As a result, no one invested in the project.

Pursuant to the settlement agreement approved Nov. 1, 2004, Anderson agreed that he led the presentation where he described for the audience an opportunity to invest in “desks” of F.E.D.I. Anderson admitted that the desks were securities in accordance with the Securities Act. In participating in the sales presentation, he further agreed that he committed acts in furtherance of a trade without being registered under the Act and that the sale of desks in Ontario was not qualified by a prospectus, as required.

In approving the proposed settlement, the Commission imposed the following sanctions upon Anderson:

  • he is permanently prohibited from trading in the desks of F.E.D.I.;
  • he is permanently prohibited from providing copies of certain documents (delivered at the June 4 meeting) to any member of the public;
  • the exemptions contained in Ontario Securities law will not apply to Anderson for four years from November 1, 2004, save those trades effected through an agent who is a registered dealer under the Act;
  • a reprimand; and
  • the Commission ordered Anderson is to pay $10,000.00 towards a portion of the costs of the investigation.

    The Commission also reprimanded Anderson. In so doing, the Commission noted that it was through the “quick action of the Commission in issuing (the temporary order) that people were saved a lot of money”.