(August 24 – 13:10 ET) – The Alberta Securities Commission has made orders against W.H. Stuart Mutuals Ltd. (WHSM), Dianne Stuart and Howard Stuart. WHSM is registered as a mutual fund dealer in Alberta, Ms. Stuart is the secretary/treasurer and compliance officer and Mr. Stuart is the president and CEO.

The commissions says a panel of the ASC found that Ms. Stuart, while acting in a senior compliance and management position with WHSM, “orchestrated a crude, but deliberate scheme to circumvent Alberta law.” This was accomplished by disguising sales of securities that occurred in Alberta to Alberta residents as sales to B.C. residents. If the sales had occurred in B.C., they would have qualified for an exemption in that province. In Alberta, no such exemption is available, and the filing of a prospectus and registration are required for these sales.

The ASC panel noted that, “we cannot protect the public interest and the integrity of the capital markets if we tolerate deliberate violations of securities law by persons in Ms. Stuart’s position.” Ms. Stuart has been ordered to resign any positions as a director or officer of any company for the remainder of her life.

The pane found that Mr. Stuart knew that securities were being sold by WHSM in Alberta, but there was no evidence showing any involvement by him in the plan to circumvent Alberta law. His responsibility for the violations stem from his position as president and CEO of WHSM. The panel emphasized that, “persons in senior executive positions with registered dealers will be held accountable for failing to ensure compliance with applicable securities laws.” Mr. Stuart has been ordered to pay an administrative penalty of $25,000.

The ASC panel stated that, “registered dealers will be held accountable for failing to ensure their employees’ compliance with applicable securities law,” and ordered WHSM to pay an administrative penalty of $150,000.

WHSM, Ms. Stuart and Mr. Stuart have also been ordered to pay $17,000 for investigation and hearing costs.

Copies of the sanction contained in the Reasons for Decision can be obtained from the ASC web site at www.albertasecurities.com.
-IE Staff