At a hearing held last Monday, the Ontario Securities Commission approved a settlement agreement between the commission and Foundation Equity Corporation. The commission announced the settlement today.

Alberta-based Foundation carried out an unlawful distribution of securities when it sold approximately 1.2 million of its shares in Global Thermoelectric Inc. through the Toronto Stock Exchange. At the time of the sale, Foundation owned more than 20% of the issued and outstanding shares of Global and therefore was deemed under the Securities Act to be “a party in a position to materially affect the control of Global.”

Foundation sold the shares from its control block without satisfying the applicable hold period and notice requirements under the Securities Act.

Under the terms of the settlement, Foundation is required to retain counsel in Ontario to carry out all future filings with the commission and the TSX. It must also provide its Ontario counsel and any stockbrokers it employs in Ontario with regularly updated information concerning the status of Foundation’s shareholdings and must ensure that at any given time at least one of its directors has successfully completed the Partners, Directors and Officers course. In addition, the Commission reprimanded Foundation and ordered it to pay $2000 in costs.

Copies of the Notice of Hearing, Statement of Allegations of Staff of the Commission and the Settlement Agreement are available from the OSC’s web site.