(November 2 – 09:30 ET) – Staff of the Ontario Securities Commission have finally brought enforcement action in the YBM Magnex International Inc. case. They have levelled accusations against the firm’s lead underwriters, Griffiths McBurney & Partners and First Marathon Securities Ltd. and 10 directors, officers and advisors of YBM.
Along with the proceedings against the two brokerages, the OSC is also going after: Owen Mitchell, FMSL vice president and director who also acted as a director of the YBM Audit Committee; former Ontario premier, David Peterson; YBM’s corporate counsel; its chairman; its chief executive; the chief operating officer; the chief financial officer; YBM itself, and a few other directors.
The OSC alleges that the firm filed a prospectus which did not contain the pledged full, true, plain disclosure. The prospectus was signed off on by its directors, officers and underwriters. Further the OSC alleges that YBM did notlive up to its continuous disclosure obligations.
The OSC is seeking sanctions before its own tribunal first, which will deal with their registrations. It intends to continue the case beyond that to the Superior Court of Justice for additional sanctions, including financial penalties and prohibitions against serving as an officer or director of a public company.
Lawrence Wilder, from Toronto law firm Cassells Brock & Blackwell, YBM’s corporate counsel, issued a statement denying the allegations. He says he will try to block the OSC’s charges over jurisdictional issues.
“In light of the importance of this issue, the impact of these proceedings on Mr. Wilder, and the chilling effect which such proceedings will have on the independence of the bar generally, Mr. Wilder and Cassels Brock & Blackwell are bringing an application to the Ontario Superior Court of Justice, Divisional Court, to prohibit the Commission from proceeding against Mr. Wilder. A motion to stay the proceeding as against Mr. Wilder on an interim basis pending argument of the application for judicial review will be made as soon as possible.”
Griffiths McBurney also issued a statement declaring its innocence, although it did not raise the substance of its defence.
The first appearance on these accusations is scheduled for November 29.
-IE Staff