Vancouver Stock
Exchange: Birdsall, Approved Person Disciplined
|
|
Notice to Members #63/99
By way of an Offer of Settlement, William Mark Birdsall ("Birdsall") an
Approved Person employed by Union Securities Ltd. ("Union"), has agreed to the
imposition of the following penalties by the Exchange for violation of Exchange By-Law
5.02(4):
- payment of a fine in the amount of $10,000;
- withdrawal of VCT approval for a period of 30 days, and
- an assessment of investigative costs in the amount of $2,500.
By-Law 5.02(4) states in part that a specific infraction includes the purchasing and
selling of securities where the person knows or ought to have known that the effect of
such a purchase or sale would be to unduly disturb the normal position of the market or
create an abnormal market condition in which market prices do not fairly reflect current
market values.
During the period of November 1, 1996, to November 29, 1996, (the "Relevant
Period") Birdsall was an approved VCT Trader employed by Union.
During the Relevant Period the shares of Exchange listed Vantage Enterprises Corp.
("Vantage") increased in price from $5.40 to $13.35. The client accounts of an
Investment Adviser (the "Investment Adviser"), an Approved Person employed by
Union, actively traded Vantage. Investment Adviser directed that the Vantage client orders
be executed by Birdsall.
During the Relevant Period, the Investment Adviser's clients established a pattern of
selling Vantage shares into the market and then immediately purchasing Vantage shares at
consecutively higher prices (the "Back Fills").
During the Relevant Period, Birdsall received orders by telephone from the Investment
Adviser. Birdsall executed a total of 38 Back Fills. Of the 38 Back Fills, 12 or 31.5%
resulted in Vantage new high trade prices. The Back Fill buy and sell orders were executed
by Birdsall either simultaneously or immediately one after the other. The Back Fill sell
orders sold Vantage shares into the market, while the Back Fill buy orders immediately
increased the Vantage trade price by $0.05 to $0.30. The Back Fill trades unduly disturbed
the Vantage market.
During the Relevant Period the orders executed by Birdsall in the shares of Vantage
accounted for approximately 11% of the total market buy volume (the "Buy
Volume"). The 11% Buy Volume resulted in 25% of the total market uptick trades and
20% of the total market new high trades.
Birdsall, by entering the Back Fill orders, purchased and sold Vantage shares, when he
ought to have known that the effect of such a purchase or sale would be to unduly disturb
the Vantage market.
Birdsall thereby violated Exchange By-Law 5.02(4)(a).
The conduct of the Investment Adviser remains under review by the Exchange.
The actions of Union in this matter were determined to be part of the internal control
breakdown which was addressed in Notice to Members #97/78.
- 30 -
Back
to Index of News Releases |
