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To: Buckey who wrote (12)	9/14/2002 8:33:19 PM
From: Jim Bishop	Respond to of 46

Regulators seek additional sanctions Move follows 30-day suspension in stock manipulation case David Baines Vancouver Sun Saturday, September 14, 2002 (Arthur) Smolensky Unhappy with a 30-day suspension meted out by Vancouver stock exchange officials, the B.C. Securities Commission announced Friday it is seeking additional sanctions against senior broker Arthur Smolensky. In a notice of hearing, the commission alleged that Smolensky, chairman and founder of Global Securities Corp., manipulated downward the share price of Vancouver-based Trooper Technologies in August 1997 to enable him to buy the stock at a lower price. In March 2001, Smolensky admitted to the Canadian Venture Exchange (now called the TSX Venture Exchange) that he had manipulated the stock and agreed to a 30-day suspension, a $115,000 fine and $10,000 in investigation costs. Smolensky is also president and principal shareholder of a sister company, Global Futures Corp. Because that firm was not under the exchange's supervision, his suspension did not affect his ability to deal securities with that firm. In an interview Friday, Smolensky's lawyer, Howard Shapray, complained that the commission's notice of hearing amounts to double jeopardy for his client. He said that if commission enforcement staff were not satisfied with the CDNX settlement, they could have appealed to a commission tribunal within the statutory 30-day appeal period. "By going this route, I say they are doing an end run around their own statute," he said. Shapray also complained that the amount of time that has lapsed from the date of the alleged offence and the CDNX settlement to the commission's notice of hearing is "completely unreasonable and prejudicial." On the issue of double jeopardy, Sasha Angus, the commission's head of enforcement, said the commission "has its own jurisdiction in these matters and we feel the conduct in this case was such that it requires a response from the commission." He added: "Mr. Smolensky is ... head of a brokerage house. He has a very responsible position and this is a very serious matter." With regard to the delay, Angus said: "We wanted to conduct our own investigation into the matter in the depth that we felt it should be done, and draw our own conclusions before we issued a notice of hearing." In the notice of hearing the commission alleges that: - On the day in question, trading in Trooper shares was a record 609,078 shares. The stock opened at $1.43 and closed at $1.05. - Smolensky dominated trading through his trading authority over three accounts in the names of Lacasse Cecille Investments Ltd., Hua Hwa Enterprise Ltd and Cayman Islands Securities Ltd., all incorporated in the Cayman Islands. - Under his direction, Cayman Islands Securities, in which he had a beneficial interest, sold shares in the last five minutes of trading which caused Trooper's share price to close at a low of $1.05. - Cayman Islands Securities, again directed by Smolensky, sold short 27,254 shares at prices lower than the last trade before the short sale, contrary to stock exchange rules. - Smolensky knew that his trading activity would artificially depress the share price. The notice of hearing further alleges that: - After the close of trading, Trooper announced it had completed a private placement agreement for the sale of 10,000 units at 84 cents each. One the subscribers was Skana Holdings Ltd., of which Smolensky was a director and substantial shareholder. - Smolensky was aware of the private placement and its "imminent announcement" while he was conducting or directing trades in Trooper shares. - The purpose of his trading was "to reduce Trooper's share price so that Trooper could price the private placement at a lower price per share than that which would have otherwise been permitted" by the stock exchange. - The private placement was a material fact that had not been generally disclosed to the public. Due to Smolensky's special relationship with Trooper, his share sales amounted to illegal insider trading. If Smolensky is found to have violated securities regulations, the hearing panel will consider whether it is in the public interest to revoke Smolensky's trading rights, prohibit him from acting as an officer or director of a public company, and suspend or revoke his broker's registration. A hearing date will be set on Sept. 25. dbaines@pacpress.southam.ca canada.com