Order: In the Matter of Gordon-Daly Grenadier Securities et al.
IN THE MATTER OF THE SECURITIES ACT,
R.S.O. 1990, c. S.5, AS AMENDED
IN THE MATTER OF
GORDON-DALY GRENADIER SECURITIES, DAVID BREGMAN, ALAN GREENBERG,ORON STERNHILL AND WANGYAL TULOTSANG
(Subsections 127(1) and 127.1)
WHEREAS on July 27, 2000, the Ontario Securities Commission (the"Commission") issued a notice of hearing pursuant to subsections 127(1) and 127.1 of theSecurities Act (the "Act") in respect of Gordon-Daly Grenadier Securities ("Gordon-Daly"),David Bregman ("Bregman"), Alan Greenberg ("Greenberg"), Oron Sternhill ("Sternhill")and Wangyal Tulotsang ("Tulotsang");
AND WHEREAS Gordon-Daly, Bregman, Greenberg, Sternhill and Tulotsangentered into a settlement agreement dated July 27, 2000 (the "Settlement Agreement") inwhich they agreed to a proposed settlement of the proceeding, subject to the approval ofthe Commission;
AND UPON reviewing the Settlement Agreement and the statement of allegationsof Staff of the Commission, and upon hearing submissions from counsel for Gordon-Daly,Bregman, Greenberg, Sternhill and Tulotsang and from Staff of the Commission;
AND WHEREAS the Commission is of the opinion that it is in the public interest tomake this Order;
IT IS ORDERED THAT:
(1) the Settlement Agreement dated July 27, 2000, attached to this Order, is herebyapproved;
(2) pursuant to clause 2 of subsection 127(1) of the Act, Bregman and Sternhill areeach prohibited from trading in securities for a period of three years effective fromthe date of this Order;
(3) pursuant to clause 2 of subsection 127(1) of the Act, Greenberg is prohibited fromtrading in securities for a period of one year effective from the date of this order;
(4) pursuant to clause 6 of subsection 127(1) of the Act, Gordon-Daly, Bregman,Greenberg, Sternhill and Tulotsang are hereby reprimanded;
(5) pursuant to clause 1 of subsection 127(1) of the Act, the registration of each ofGordon-Daly, Bregman (for a period of sixteen years), Greenberg (for a period offifteen years), Sternhill (for a period of fifteen years) and Tulotsang (for a period oftwo years) is hereby suspended effective forty-five days from date of this order;
(6) Gordon-Daly shall, on or before three days from the date of this order, send to eachof its clients a letter substantially in the form attached as Schedule "B" to theSettlement Agreement;
(7) pursuant to clause 1 of subsection 127(1) of the Act, the following terms andconditions are hereby imposed upon the registration of Gordon-Daly:
(a) the registrant will not act as principal or as agent in the purchase or sale ofany securities to a client of the registrant;
(b) the registrant shall, within thirty days of the date of this order, cease to carryon its activities as a securities dealer;
(c) the registrant shall limit its activities to the orderly wind-up of its businessand affairs, including the return of all clients' securities and free creditbalances, or the transfer of those securities and balances to a firm that is amember of the Investment Dealers Association of Canada (the "IDA"), uponthe request of the client. Gordon-Daly will pay all costs of transfers ofclients' securities and credit salaries from Gordon-Daly to a firm that is amember of the IDA. The return of all clients' securities and free creditbalances or the transfer of those securities and balances to a firm that is amember of the IDA must be completed prior to the effective date ofsuspension of the registration of the registrant;
(d) the registrant shall file the following documents with the Manager ofCompliance of the Ontario Securities Commission ("the Manager") on thefollowing dates:
(i) thirty days after the date of suspension, a balance sheet of theregistrant reported thereon by the registrant's independent auditorwithout qualification as at the date of suspension, or such other dateas may be agreed upon between the registrant and the Manager; and
(ii) forty-five days after the date of suspension or such other date as maybe agreed upon between the registrant and the Manager, a comfortletter prepared by the registrant's independent auditor in accordancewith section 5815 of the CICA Handbook confirming that the financialobligations of Gordon-Daly to its clients have been discharged.
(e) in the course of transferring client accounts to a firm that is a member of theIDA, the registrant shall transfer all of the registrant's books and recordsnecessary to record properly its business transactions and financial affairsrelating to those client accounts, whether or not such books and records arekept by means of mechanical, electronic or other devices;
(f) The registrant will not:
(i) reduce its share capital in any manner, including the redemption, re-purchase or cancellation of any of its shares;
(ii) reduce or repay any indebtedness which has been subordinated;
(iii) directly or indirectly make any payments, including payments by wayof reimbursement for services rendered, loan, advance, bonus,dividend, repayment of capital or other distribution to:
(a) any director, officer, partner or shareholder of the registrant;or
(b) any related, associated or affiliated person or company of theregistrant or of any such person; or
(c) any director, officer, partner or shareholder of such a related,associated or affiliated person or company; or
(iv) increase its capital assets as defined pursuant to section 3060 of theCICA Handbook unless pursuant to a commitment entered into priorto July 12, 2000;
until such time as the registrant files with the Manager of Complianceof the Ontario Securities Commission an auditor's comfort letter inaccordance with section 5815 of the CICA Handbook confirming thatGordon-Daly's financial obligations to its clients have beendischarged.
(8) pursuant to clause 127.1(2)(b) of the Act, the respondents are ordered tomake payment in the amount of $25,000 by certified cheque to theCommission.
August 9th, 2000."J. A. Geller"
"Robert W. Korthals"
"R. Stephen Paddon"