methinks Patty a tad on the shady side - LOL
BCSC gives Patterson offshore jaywalking ticket
Donner Minerals Ltd DML
Shares issued 42,609,657 Oct 13 close $0.10
Fri 13 Oct 2000 News Release
See B.C. Securities Commission (BCSEC) News Release
Mr. Steve Wilson reports
A settlement of issues has been reached between David Michael Patterson and
the executive director of the British Columbia Securities Commission.
Agreed statement of facts
Mr. Patterson acknowledges the following facts as correct only for the
purposes of regulatory proceedings here or elsewhere.
The D. Patterson Trust (and subsidiaries)
During 1989 and following, Ryco Trust Limited and related companies
(collectively Ryco) provided trust, investment and related services from
offices located in St. Helier, Jersey, Channel Islands, United Kingdom.
In or about September, 1990, Mr. Patterson purported to settle a trust
named the D. Patterson Trust (also known by a coding number, used by Ryco,
as JT167). Ryco was the trustee of the trust. The named beneficiaries of
the trust, nominated by Mr. Patterson, included his wife, his daughter, his
parents and his parents-in-law.
During September, 1990, Mr. Patterson directed Ryco to acquire a company on
behalf of the D. Patterson Trust. Ryco duly acquired a company incorporated
in the British Virgin Islands known as Bray International Limited. Legal
title to the shares of Bray thereafter was vested in Ryco as trustee of the
D. Patterson Trust.
On or about Jan. 14, 1994, Ryco was sold to Integro Trust Holdings (Jersey)
Limited, (Integro).
Hereinafter, unless otherwise specified, Ryco/Integro will be used to refer
to the activities of Ryco and Integro (and associated companies) in
relation to Mr. Patterson, the D. Patterson Trust and Bray, as appropriate.
From September, 1990, to October, 1996, Mr. Patterson gave instruction or
direction to Ryco/Integro respecting the trading activities of Bray and had
de facto control or direction over the shares held by Bray from time to
time in reporting issuers in British Columbia.
Relationship with reporting issuers
From time to time, Mr. Patterson was an insider of reporting issuers in the
province of British Columbia, as follows:
Donner Minerals Ltd. -- a director and thereby an insider, from May, 1995,
until the present, and president and chief executive officer from August,
1996, until the present;
Crazy Horse Industries Inc. -- an officer and thereby an insider, from
November, 1993, until December, 1995, and the president from December,
1995, until the present;
Allied Strategies Inc. -- a director and thereby an insider, from October,
1990, until April, 1994, and the president and chief executive officer
during 1992 and 1993.
Zicor Mining Inc., which prior to August, 1995, was known as Hawk Resources
Inc. -- a director and thereby an insider, from March, 1995, until
December, 1996;
Consolidated Valley Ventures Ltd. -- a director and thereby an insider,
from November, 1993, until December, 1994, and president from March, 1994,
until December, 1994.
Failure to file insider trading reports
Trading in Donner
Between Nov. 27, 1996, and Jan. 10, 1997, while under Mr. Patterson's
control or direction, Bray:
purchased, in 18 trades, 80,500 shares of Donner for a total cost of
$112,192.00; and
sold, in 12 trades, 40,900 shares of Donner for proceeds net of
commission of $66,731.00.
Mr. Patterson failed to file insider reports disclosing his control or
direction over, the aforesaid shares in Donner contrary to Section 87 of
the act.
Trading in Crazy Horse
Between Dec. 31, 1996, and Jan. 6, 1997, while under Mr. Patterson's
control or direction, Bray transferred, in two trades, 339,500 shares of
Crazy Horse out of its trading accounts.
Mr. Patterson failed to file insider reports disclosing his control or
direction over, the aforesaid shares in Crazy Horse contrary to Section 87
of the act.
Trading in Allied
During December, 1993, while under Mr. Patterson's control or direction,
Bray purchased, in one trade, 495,000 special warrants in Allied for
$594,000.
Mr. Patterson failed to file insider reports disclosing his control or
direction over the aforesaid securities in Allied contrary to Section 87 of
the act.
Trading in Zicor
Between March, 1996, and December, 1996, while under Mr. Patterson's
control or direction, Bray:
pursuant to a single recommendation by Mr. Patterson to sell all of
the Bray holdings of Zicor, sold, in 14 trades, 59,046 shares for a
total cost of $34,641.68;
received into its trading accounts 59,046 shares of Zicor; and
Mr. Patterson failed to file insider reports disclosing his control or
direction over the aforesaid shares in Zicor contrary to Section 87 of
the act.
Stock exchange filings
Mr. Patterson caused Ryco/Integro, on behalf of Bray, to purchase
securities by way of private placements by reporting issuers as follows:
during December, 1993, 495,000 special warrants in Allied;
during February, 1994, 60,000 units, each unit comprising one share
and one warrant, in Consolidated Valley.
At the time of each of the private placements, Mr. Patterson was an insider
of, or in a special relationship with, each of the issuers.
In respect of the purchase of shares and/or warrants by Bray, Mr. Patterson
caused to be filed with the former Vancouver Stock Exchange (VSE), a
private placement questionnaire and undertaking (Form VSE 11-1a) which, in
answer to the request by the VSE for "names and addresses of person(s)
having greater than 10-per-cent beneficial interest in the purchaser
(namely Bray), if a corporation," Mr. Patterson disclosed particulars of
ownership of the trustee corporation, but failed to disclose the
relationship extant between Mr. Patterson, an insider, and Bray.
Mitigating factors
In reaching the agreement the executive director has taken into account the
following representations of Mr. Patterson:
Mr. Patterson represents that neither in the creation nor the
operation of the trust was there the intention to defeat securities
reporting obligations in British Columbia.
Mr. Patterson represents that trades made by Bray were made in the
normal course of market activity. Mr. Patterson further represents,
and staff does not disagree, that at no time was the trading
undertaken in reliance upon undisclosed material facts or changes.
Mr. Patterson represents that prior to creating the trust he received
legal advice to the effect that the trust was a legal method of asset
protection and was created as a discretionary trust, which prohibited
anyone other than the trustees to make final decisions on what
securities ought to be traded. The trustees looked to Mr. Patterson
for advice on trades and almost invariably took that advice, but
retained at law the power and ability to reject his recommendations.
Mr. Patterson has fully co-operated with staff throughout the enquiry.
Undertaking
Mr. Patterson undertakes and agrees to the following:
to pay to the British Columbia Securities Commission, upon signing of
this agreement, the sum of $50,000 of which $10,000 represents the
costs to the commission of the investigation; and
to comply with the act and the Securities Rules, B.C. Reg. 194197, and
all applicable regulations, policies and guidelines, from the date of
this agreement.
Order
Mr. Patterson consents to an order by the executive director that:
under Section 161(1)(c) of the act, the exemptions described in
sections 44 to 47, 74, 75, 98 and 99 of the act do not apply to Mr.
Patterson in respect of the trading of securities of any issuer for a
period of 15 months from the date of the order; and
under section 161 (1)(d) of the act, Mr. Patterson resign any position
held as a director or officer of any issuer and is prohibited from
becoming or acting as a director or officer of any issuer for a period
of 15 months from the date of the order.
Waiver
Mr. Patterson waives any right he may have, under the act or otherwise, to
a hearing, hearing and review, judicial review or appeal related to, in
connection with, or incidental to this agreement.
(Readers wishing details of the Patterson prosecution may refer to Street
Wires dated Dec. 21, 1999, Feb. 9, 2000 and Aug. 16, 2000. The related
prosecution of his disgraced securities lawyer Michael Seifert is noted in
Street Wires dated Dec. 17, 1999, and Dec. 20, 1999. The related
prosecution of fellow stock promoter Doug Mason is noted in Street Wires
dated July 7, July 12 and July 13 2000.)
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