An Offer of Settlement between the Canadian Venture Exchange Inc. (the "Exchange") and Kevin Patrick O’Neill was accepted by the Exchange on March 10, 2000. Mr. O’Neill, at the time of the infraction, was employed by Canaccord Capital Corporation ("Canaccord") in Canaccord’s corporate finance department.

Rules Violated

Mr. O’Neill has admitted to violating By-law 5.01 of the Vancouver Stock Exchange ("VSE") that states in part, that any conduct which is unbecoming or inconsistent with just and equitable principles of trade or detrimental to the interests of the Exchange or the public.

Pursuant to the terms of the Offer of Settlement, Mr. O’Neill agrees to the following penalty:

1. payment of a fine in the amount of $25,000;
2. prohibition from becoming an Approved Person or an employee of a Member Firm for a period of five years; and,
3. payment of $7,500 towards the costs of the Exchange’s investigation.

Summary of Facts

Prior to commencing his employment with Canaccord, Mr. O’Neill had been self-employed as a consultant in the area of corporate finance. Mr. O’Neill’s understanding was that he had conveyed this fact to Canaccord, that Canaccord was aware of this fact and was agreeable to him continuing his consulting practice while employed at Canaccord.

For several months prior to the commencement of his employment at Canaccord, Mr. O’Neill had provided corporate finance consultation services to Instep Mobile Communications Inc. ("Instep") and was paid for these services by Instep.

In July 1994, Instep entered into an engagement agreement with Canaccord (the "Instep Engagement Agreement"). Mr. O’Neill executed the Instep Engagement Agreement on behalf of Canaccord. In the Instep Engagement Agreement, Canaccord agreed to act as Instep’s advisor, agent and sponsor with respect to an initial public offering and subsequent listing on the VSE of the common shares of Instep and Instep agreed to engage Canaccord as its sole and exclusive advisor, agent and sponsor.

While still employed by Canaccord, but prior to the commencement of the Instep Engagement Agreement, O’Neill did not expressly disclose this fact to Canaccord. In addition, O’Neill failed to disclose to Canaccord the fact that a company (the "Company") in which he was considering acquiring an interest would be performing services for Instep, for which services the Company subsequently received payment. Mr. O’Neill, however, did not himself receive any direct payment or benefit arising from the payment to the Company for those services.

While still employed by Canaccord, and after the commencement of the Instep Engagement Agreement, Autoship Systems Corporation ("Autoship"), a company in which Mr. O’Neill had an interest, provided services to Instep for which Autoship was paid $11,000. Mr. O’Neill failed to disclose this fact to Canaccord even though he was actively involved in personally providing services to Instep on behalf of Canaccord arising from the Instep Engagement Agreement during the same period of time Autoship was providing its services to Instep.

In October 1994, Allegiant Technologies Inc. ("Allegiant") entered into an engagement agreement with Canaccord. O’Neill executed the agreement on behalf of Canaccord. In this agreement, Canaccord agreed to act as Allegiant’s adviser, agent and sponsor with respect to an initial public offering and subsequent listing on the VSE of the common shares of Allegiant and Allegiant agreed to engage Canaccord as its’ sole and exclusive advisor, agent and sponsor.

Mr. O’Neill also failed to expressly disclose to Canaccord the fact that the Company in which he was still considering acquiring an interest, would be performing services for Allegiant, for which services the Company subsequently received payment. Mr. O’Neill himself did not receive any direct payment or benefit for those services.

Mr. O’Neill ought to have known that in failing to ensure that Canaccord was fully aware of the above arrangements and had expressly consented to them, he thereby violated By-law 5.01 of the VSE.