Hmmm ... more on this off shore scenario. GO CANADA!!! Where is the FEDS when you need them.
Document No.: 2001/07/10
Subject: PACIFIC INTERNATIONAL SECURITIES INC., et. al. [Sec. 161]
Pacific International's Business
[para 13]
13. In 1993, Pacific International's commissions from accounts trading in securities listed or quoted in the U.S. totalled approximately $2,300,000.00 (approximately 14% of total commission revenue). By December 31, 1999, its commissions from this activity increased to $19,200,000.00 annually (approximately 67% of its total commission revenue), 82% of which was generated by only 15 out of Pacific International's 85 registered representatives, and 80% of which came from non-resident accounts. This increase indicates that the Respondents had a business strategy to encourage the development of this business.
[para 14]
14. From July 1, 1995, until at least December 31, 1999, (the "Material Time"), certain clients of Pacific International, most of whom were not resident in Canada, operated U.S. dollar accounts (the "Accounts"), which traded securities listed or quoted in the U.S.
[para 15]
15. The Accounts include Accounts mentioned in indictments (the "Indictments") issued in the United States, as well as a sample of Accounts at Pacific International generating the largest commission revenue in the period from January 1, 1999, to June 30, 1999. The sample was chosen from 368 Accounts on the basis that accounts generating the largest revenue are the most active, would have the greatest impact on Pacific International's revenues, and should have attracted the most compliance attention.
American Registration
[para 25]
25. Given the nature and extent of its US business, Pacific International ought, as set out in VSE Notice to Members #18/94 and IDA Bulletin #2537, to have been registered to trade in the United States as a broker dealer pursuant to both federal and state law or either of them, and would then have been subject to the requirements of American law in trading on behalf of its clients, including being a member of the National Association of Securities Dealers.
[para 26]
26. By not seeking registration and joining the NASD, Pacific International avoided the scrutiny of the NASD and avoided complying with the rules and requirements of the NASD, which could have assisted it in its gatekeeper and compliance functions.
P2bAAAT & DSAS |
