Nov. 5, 2008
SAINT JOHN (CNB) - A panel of the New Brunswick Securities Commission (NBSC) has approved a settlement agreement with two New Brunswick respondents in a hearing involving Locate Technologies Inc. and Tubtron Controls Corp. et al.
The respondents were Harry Niles and Bradley Corporate Services Ltd. (BCS). The agreement was reached in a hearing on Monday, Nov. 3.
Niles, the sole director and president of BCS, as well as BCS, both of Fredericton, have never registered to trade in securities in New Brunswick.
The settlement agreement outlines the history of Niles and BCS's actions. These actions included very serious, repeated violations of the requirements of the Securities Act and regulations. In addition, Niles and BCS blatantly ignored an order of the Court of Queens Bench instructing them not to trade. As a result, they have been permanently banned from New Brunswick capital markets and have been ordered to pay a total of $225,000 in disgorgement, administrative penalties and costs.
Niles has been acting as a promoter for Locate Technologies Inc. and raising money from New Brunswick investors since 2000. In 2001, staff of the securities regulator first contacted Niles and informed him that his activities were non-compliant with the securities regulation.
Despite having agreed not to trade in securities, Niles continued to trade in shares of Locate Technologies Inc. between 2001 and 2004, at which time the Court of Queen's Bench ordered him and BCS not to trade in securities. Contrary to the court order, Niles was subsequently found again to be trading in Locate Technologies Inc. and Tubtron Controls Corp. securities.
Niles was involved in personally soliciting and selling to New Brunswick investors, completing and delivering subscription forms, retaining other New Brunswickers to promote the sale of Locate Technologies Inc. and Tubtron Controls Corp. shares, delivering investment cheques, and receiving payments from Locate for his services. More than $1 million of Locate Technologies Inc. and Tubtron Controls Corp. shares were sold to New Brunswick residents between 2004 and 2006.
A small number of investors were asked to make their investment cheques payable to BCS. These funds, amounting to $160,000 were not forwarded to Locate Technologies Inc. or Tubtron Controls Corp. and were spent by BCS.
"The NBSC's mandate is to promote fair and efficient capital markets and to ensure honest and responsible conduct by market participants," said Rick Hancox, executive director of the NBSC. "In this case, Niles has acknowledged the seriousness of his misconduct and has accepted responsibility for his failure to comply with New Brunswick securities law."
This settlement resolves proceedings that started in October 2007 against the respondents. A full copy of the agreement and order approving the agreement are available on the NBSC website.
Proceedings with respect to the remaining New Brunswick respondents - Michael Cody and Donald Nason - were adjourned to a later date.
In an unrelated matter, an ex parte temporary cease-trade order issued on Oct. 24 was made permanent by the NBSC against First Alliance Management Inc. (FAM) and Ted Freeman. The order, effective Nov. 3, directs FAM and Freeman to cease trading in all securities, and prohibits the use of any exemptions under the Securities Act.
The NBSC is the Crown corporation that regulates the securities industry in New Brunswick. It is funded indirectly by investors through industry. Its mandate is to protect investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets as well as confidence in those markets.
MEDIA CONTACT: Michelle Robichaud, communications officer, New Brunswick Securities Commission, 506-643-7045 or 1-866-933-2222; e-mail, Michelle.Robichaud@nbsc-cvmnb.ca.