Just some old history - fortunately the 'jitney' would never be applied to this stock:
*NEWS - Sungold Gaming International Ltd - VSE fines McDermid and Thomas
Taylor
Sungold Gaming International Ltd - - - - SUM
Shares issued 15806820
1987-10-13 close $7.25
Friday Oct 24 1997
See Vancouver Stock Exchange (VSE) News Release
Mr John Forbes of the VSE reports
By way of an offer of settlement, member firm, McDermid St Lawrence Securities
has agreed to a fine of $10,000 and an assessment of investigative costs of
$2,500 for violation of by-law 5.07.1(a) and Thomas Leonard Taylor, a director,
registered representative and VCT trader with McDermid, has agreed to a fine of
$15,000 and an assessment of investigative costs of $2,500 for violation of
by-law 5.02.4(a) and 5.01(2).
By-law 5.01(2) states in part that an "Infraction" means any conduct, proceeding
or method of business which is unbecoming or inconsistent with just and equitable
principles of trade or detrimental to the interests of the public.
By-Law 5.02.4(a) states in part that a specific infraction includes the purchasing
and selling of securities where the person knows or ought to have know that the
effect would be to unduly disturb the normal position of the market or create an
abnormal market condition in which market prices do not fairly reflect current
market values.
During the Period of February 1 1995 to March 31 1995, the closing share price
of Sungold Gaming increased from $1.89 to $4.20.
Prior to and throughout the relevant period, a Taylor client had an investor
relations contract with Sungold.
During the relevant period, the client through Taylor, purchased 372,050 shares or
18.7% of the market total shares traded. Of the client purchases, approximately
56% were executed as jitney trades. The client jitney trades were executed at the
client's direction.
Taylor accepted buy orders from the client that created 230 upticks representing
49.9% of the Sungold market total upticks. The client upticks resulted in 25 new
high trades representing 48.1% of the market total new highs.
The client account established a pattern of selling shares into the market, and
shortly thereafter purchasing shares at prices higher than the previous sell trades.
In the client trading pattern either the buy or the sell side were executed as jitney
trades. These jitney trades gave a false impression of member firms trading activity
by misleading the public to believe other member firms were actively trading
Sungold shares.
During the Relevant Period, Taylor executed buy orders for the client account in
the shares of Sungold at prices higher than the previous trade or order at which a
board lot traded and there were no subsequent trades or orders that affected the
market price of Sungold. Taylor accepted orders from the client that resulted in 18
high close trades or 66.6% of the market total high close trades in the shares of
Sungold. The client high close trades were executed on 42.8% of the days which
Sungold traded.
During the relevant period, the client trading activity through Taylor unduly
disturbed the normal position of the Sungold market. The cvlient upticks and the
client high close trades unduly influenced the trading activity by creating an artificial
price for the shares of SungoId.
Taylor thereby violated exchange by-law 5.01(2) and 5.02.4(a) gatekeeper
Gatekeeper
Taylor, as a director of McDermid during the relevant period, registered
representative and VCT trader, ought to have known his obligations to act as an
industry gatekeeper as set out in Notice to Members No. 50/94. By failing to
appreciate the trading pattern of the client account, Taylor failed to meet the
standard expected as a gatekeeper.
McDermid
By-Law 5.07.1(a) states in part that a member may be found liable for the
conduct, business or affairs of an approved person of the member and therefore
subject to any penalties as if it had engaged in that conduct, business or affairs.
A member is liable for the conduct, business or affairs of an approved person of
the member. Taylor, was a director of McDermid and as such McDermid is liable
for the failure of Taylor to ensure that the normal position of the market was not
unduly disturbed. McDermid relied on Taylor's experience and seniority to ensure
compliance standards were maintained by its director and accordingly failed to
appreciate the trading pattern of the client account.
McDermid thereby failed to meet the requirements of exchange by-law 5.07(l).
(c) Copyright 1997 Canjex Publishing Ltd. canada-stockwatch.com
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