OSC - RE: IN THE MATTER OF YBM MAGNEX INTERNATIONAL INC
TORONTO, May 26 /CNW/ - The Ontario Securities Commission (the ''Commission'') announced today that it has issued a Notice of Hearing against YBM Magnex International Inc.
The hearing will commence at 9:30 a.m. on Thursday, May 28, 1998 in the Commission's main hearing room on the 8th Floor, 20 Queen Street West, Toronto, Ontario, at which time a date will be set for the continuation of the hearing.
Copies of the Notice of Hearing and the Statement of Allegations are available from the Commission, 8th Floor, 20 Queen Street West, Toronto, Ontario.
IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, c.S.5, as amended
- and -
YBM MAGNEX INTERNATIONAL INC.
NOTICE OF HEARING
(Section 127(1) & (4))
TAKE NOTICE THAT the Ontario Securities Commission (the ''Commission'') will hold a hearing pursuant to section 127 of the Securities Act, R.S.O. 1990, c.S.5, as amended (the ''Act'') at its offices on the 8th floor, 20 Queen Street West, Toronto, Ontario, commencing on the 28th day of May, 1998 at 9:30 a.m. or so soon thereafter as the hearing can be held:
TO CONSIDER:
(a) whether to extend the Temporary Order dated May 13, 1998 that trading in any securities of YBM Magnex International Inc.
(''YBM'') immediately cease until the hearing is concluded in accordance with section 127(7); and
(b) whether in the opinion of the Commission it is in the public interest to make an order pursuant to section 127(1) clause 2 of
the Act, that trading in any securities of YBM cease permanently or for such period as is specified in the order;
(c) such further and other orders as the Commission may deem
appropriate.
BY REASON of the allegations as set out in the related Statement of Allegations made by staff of the Commission dated May 26th, 1998;
AND TAKE FURTHER NOTICE that any party to the proceedings may be represented by counsel at the hearing;
AND TAKE FURTHER NOTICE that, upon failure of any party to attend at the time and place aforesaid the hearing may proceed in the absence of that party and such party is not entitled to any further notice of the proceeding.
DATED at Toronto this _____ day of May, 1998
___________________________
Secretary to the
Commission
TO: Mr. Jacob Bogatin
President and C.E.O.
YBM Magnex International
c\o Joseph Groia
Heenan Blaikie
Counsel to YBM
IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, c.S.5, as amended
- and -
YBM MAGNEX INTERNATIONAL INC.
STATEMENT OF ALLEGATIONS OF STAFF
OF THE ONTARIO SECURITIES COMMISSION
Staff of the Ontario Securities Commission (the ''Commission'') make the following allegations:
I. BACKGROUND
1. YBM Magnex International Inc. (''YBM'') is a reporting issuer in
Ontario, and has been since January 19, 1996. Its shares have been listed and posted for trading on The Toronto Stock Exchange (the ''TSE'') since March 7, 1996. YBM was incorporated in Alberta on March 16, 1994 and its head office is presently located in Newtown, Pennsylvania. There were 44,362,092 shares of YBM issued and outstanding as at April 30, 1998.
2. On May 8, 1998, YBM filed an application with the Commission
pursuant to Section 80 of the Securities Act, as amended (the ''Act''), for an order granting a 45-day extension to file and mail to its shareholders its 1997 financial statements. The reason for the request, as set out in a press release dated May 8, 1998, was the possibility that YBM would not receive an audit opinion on its 1997 financial statements from its auditors, Deloitte & Touche LLP (''Deloitte'') prior to the May 20, 1998 filing and mailing deadline.
3. On the morning of May 13, 1998, the TSE announced a halt in the trading of YBM securities pending an announcement by YBM. Later that same day the Commission ordered that trading in any securities of YBM immediately cease for a period of fifteen days from the date of the order unless extended by order of the Commission (the ''Temporary Order'').
4. On May 20, 1998 YBM advised the Commission that it would be unable to file its audited financial statements for the year ended December 31, 1997 within the time limits required by section 78 of the Act as it had yet to receive an audit opinion from its auditors, Deloitte.
5. On May 25, 1998, YBM consented to an extension of the Temporary Order.
II. CONDUCT CONTRARY TO THE PUBLIC INTEREST
6. In YBM's capacity as a reporting issuer in Ontario, its financial disclosure fails to meet the standard required of a reporting issuer in this jurisdiction having regard to significant concerns respecting the Company's 1996 and 1997 financial statements, including:
- the failure to provide audited financial statements for the year ending December 31, 1997 due to significant unresolved concerns identified by Deloitte;
- the significant uncertainty which exists in respect of the financial statements for the year ending December 31, 1996 for which Deloitte issued an unqualified audit opinion but with which it is now determining whether it will continue to be associated;
and
- the failure to disclose the existence, nature and extent of
Deloitte's concerns in a timely manner.
7. By reason of the foregoing, Staff alleges that it is in the public interest for the Commission to order that trading in any securities of YBM permanently cease, or alternatively, cease for such period as may be specified by the Commission.
8. Such further and other allegations as Staff may advise and the Commission may permit.
DATED at Toronto this 26th day of May, 1998.
-0- 05/26/98
For further information: Larry Waite, Director, Enforcement Branch, (416) 593-8156
Notice of hearing issued; cease trade order extension agreement
YBM Magnex International Inc YBM
Shares issued 44,222,901 May 13 close $14.35
Tue 26 May 98 News Release
Mr. Larry Waite of the Ontario Securities Commission reports:
The Ontario Securities Commission has issued a notice of hearing against YBM Magnex International.
The Ontario Securities Commission will hold a hearing pursuant to section 127 of the Securities Act, R.S.O. 1990, c.S.5, as amended at its offices on the 8th floor, 20 Queen Street West, Toronto, Ontario, commencing on May 28, 1998 at 9:30 a.m. or so soon thereafter as the hearing can be held:
To consider:
1. Whether to extend the temporary order dated May 13, 1998 that trading in any securities of YBM Magnex International immediately cease until the hearing is concluded in accordance with section 127(7); and
2. Whether in the opinion of the commission it is in the public interest to make an order pursuant to section 127(1) clause 2 of the act, that trading in any securities of YBM cease permanently or for such period as is specified in the order;
3. Such further and other orders as the commission may deem appropriate. By reason of the allegations as set out in the related statement of allegations made by staff of the commission dated May 26, 1998; And take further notice that any party to the proceedings may be represented by counsel at the hearing;
And take further notice that, upon failure of any party to attend at the time and place aforesaid the hearing may proceed in the absence of that party and such party is not entitled to any further notice of the proceeding.
Mr. Guy Scala reports:
YBM Magnex International has agreed with the OSC to an extension of the temporary cease trade order originally issued by the Commission on May 13, 1998. In addition, the company and its counsel are continuing to co-operate fully with authorities in both the U.S. and Canada.
YBM is taking the necessary steps to finalize its 1997 financial statements and to resolve any other issues with the OSC and the TSE so that trading can resume as soon as possible.
YBM continues to carry on its business operations in the U.S. and internationally.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
This means that all sides have more time to deal with what has the clear potential of becoming the greatest regulatory embarrassment in the 18 years I've been following Canada's stock markets.
How the Alberta and Toronto Stock Exchanges - and the cheer-leading squad of Bay Street brokers, mutual fund managers and advisors - explain this situation and their conduct should continue to amaze and astound even those who think they've seen it all before in the world of junior stock promotions.
YBM Magnex has retained a top flight Toronto lawyer, Joe Groia, who used to be the OSC's director of enforcement.
This promises to be a classic chapter in the history of North American stock scandals. As well, there is the added bonus of learning about Russian organized crime as the case unravels...
And, who knows, one day, the public may even learn how much magnet business was really going on in Russia, the Ukraine and other parts of Eastern Europe. |
