Canada also has its fair share of Jamie Kiggens. My favorite "dead Fish" analyst is Mark Pavan of Yorkton Securities. They don't just hype dot coms, they create their own out of shell companies. How about this call:
Yorkton has also come under criticism for its role in the development and promotion of Book4golf.com, an online tee-timereservation service that began life as a shell company named after Mr. Paterson's daughter. Yorkton underwrote several financing deals for Book4golf.com, and the company's research director Roger Dent joined the board of directors. His subordinate, analyst Mark Pavan, consistently rated the company a strong buy last winter and at one point said the stock would hit $40 per share. Mr. Paterson went even further, predicting it would go to $100 and become "one of Canada''s greatest technology success stories of all time." Book4Golf.com peaked at $22 in January and closed Friday at 0.85¢.
How come none of these people ever goes to jail? At worst they get a slap on the wrist.
Here's the full story:
OSC probes Yorkton for conflicts
Unnamed financings
Theresa Tedesco, Chief Business Correspondent, with files from Sean Silcoff
Financial Post
The Ontario Securities Commission has forced Yorkton Securities Inc. to disclose that it is being investigated for possible
conflicts of interest in relation to a number of unnamed financings in which the brokerage firm participated, the company
revealed yesterday.
According to a release issued by Yorkton, the provincial securities regulator demanded that one of the companies currently
being financed by Yorkton called Engineering.com, must disclose information about the informal probe in its regulatory
prospectus filing.
In its statement, Yorkton revealed that "OSC staff is investigating potential conflicts with respect to its role as sole or lead
underwriter in certain past and unspecified financings." However, according to Yorkton lawyer and director Alan Schwartz,
the OSC has not made any allegations and has not "provided us with any other information and I'm disappointed that
they've used one of our clients for disclosure." According to Mr. Schwartz, the OSC has not interviewed employees at
Yorkton and has not provided any correspondence outlining its investigation.
The OSC declined to comment.
Yorkton financed a private placement for Engineering.com but OSC staff refused to receipt the company's prospectus
unless it disclosed the investigation, which it considered a material fact.
In its regulatory filing, Engineering.com said that "no allegations of potential conflicts of interest" were made by the OSC
and its relationship with Yorkton.
However, the documents revealed that Engineering.com was advised by commission staff on Nov. 9 that its investigation
was reviewing whether the "market value of the securities that were the subject of these prior financings may have been
affected by one or more potential conflicts."
The four areas being probed are whether in its lead role as underwriter, Yorkton employees and executives were trading
shares in companies they financed; whether Yorkton was the sole provider of research; other relationship between Yorkton
executives and employees and the degree of control or influence exercised by Yorkton over the board of directors of the
companies it financed.
The company said that if it did not disclose the existence of the confidential investigation by the OSC, the regulator would
not clear the prospectus.
In its own statement, Yorkton said it "strongly refutes any suggestion it has contravened applicable securities laws in
connection with its role as underwriter in financings in which it has acted as sole or lead underwriter."
Since 1995, Scott Paterson, chairman and chief executive of Yorkton, has turned the company into the leading underwriter
of young e-commerce firms, helping to launch such hot technology plays as Zero-Knowledge, Open Text and Certicom.
But Mr. Paterson and his firm have come under criticism for their active role in building up some of the companies. In some
instances, Mr. Paterson, his colleagues and the firm have invested heavily in dormant shell companies for pennies a share
before taking them through a series of reverse takeovers, private placements, offerings, mergers and acquisitions. At each
step, the firm has taken a cut in fees and shares, compiling millions of shares along the way.
Yorkton has also come under criticism for its role in the development and promotion of Book4golf.com, an online tee-time
reservation service that began life as a shell company named after Mr. Paterson's daughter. Yorkton underwrote several
financing deals for Book4golf.com, and the company's research director Roger Dent joined the board of directors. His
subordinate, analyst Mark Pavan, consistently rated the company a strong buy last winter and at one point said the stock
would hit $40 per share. Mr. Paterson went even further, predicting it would go to $100 and become "one of Canada''s
greatest technology success stories of all time." Book4Golf.com peaked at $22 in January and closed Friday at 0.85¢.
ttedesco@nationalpost.com |
