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ALBERTA SECURITIES COMMISSION VARIATION ORDER Citation Kustom by dffhrtcv3

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									                         ALBERTA SECURITIES COMMISSION

                                   VARIATION ORDER


Citation: Kustom Design Financial Services Inc., Re, 2011 ABASC 244           Date: 20110426


          Kustom Design Financial Services Inc., Kustom Design Group Inc.,
                Hightide Management Inc., Synergy Group (2000) Inc.,
       Michael Edward Lepitre, Mark Adrian Jones and Leonard Jonathan Zielke

Background

1.     On 26 August 2010 the Alberta Securities Commission (the Commission) issued a
       decision on sanction and costs against Michael Edward Lepitre (Lepitre) and Mark
       Adrian Jones (Jones), among others (the 2010 Decision, cited as Re Kustom Design
       Financial Services Inc., 2010 ABASC 415), in view of having earlier (in the decision
       cited as Re Kustom Design Financial Services Inc., 2010 ABASC 179) found Lepitre and
       Jones, among others, to have contravened the Securities Act, R.S.A. 2000, c. S-4 (the
       Act) and to have acted contrary to the public interest.


2.     The orders made in the 2010 Decision against Lepitre (the Lepitre Sanctions) were that:

                     under sections 198(1)(b) and (c), Lepitre cease trading in or
                     purchasing securities, and all of the exemptions contained in
                     Alberta securities laws do not apply to him, until (and including)
                     1 September 2030, except that this order does not preclude Lepitre
                     from trading in or purchasing securities through a registrant (who
                     has first been given a copy of this decision) in:
                             one account for Lepitre's benefit;
                             registered retirement savings plans ("RRSPs"), registered
                             retirement income funds ("RRIFs") or registered education
                             savings plans ("RESPs") (as defined in the Income Tax Act
                             (Canada)) or locked-in retirement accounts for the benefit
                             of one or more of Lepitre, his spouse and his children; or
                             both;
                     under sections 198(1)(d) and (e), Lepitre resign all positions he
                     holds as a director or officer of any issuer, and he is prohibited
                     from becoming or acting as a director or officer (or both) of any
                     issuer, until (and including) 1 September 2030;
                     under section 198(1)(e.3), Lepitre is prohibited from acting in a
                     management or consultative capacity in connection with activities
                     in the securities market, until (and including) 1 September 2030;
                     and
                     under section 199, Lepitre pay an administrative penalty of
                     $150 000[.]


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3.   The orders made in the 2010 Decision against Jones (the Jones Sanctions) were that:

                   under sections 198(1)(b) and (c), Jones cease trading in or
                   purchasing securities, and all of the exemptions contained in
                   Alberta securities laws do not apply to him, until (and including) 1
                   September 2020, except that this order does not preclude Jones
                   from trading in or purchasing securities through a registrant (who
                   has first been given a copy of this decision) in:
                       one account for Jones's benefit;
                       RRSPs, RRIFs or RESPs or locked-in retirement accounts for
                       the benefit of one or more of Jones, his spouse and his
                       children; or
                       both;
                   under sections 198(1)(d) and (e), Jones resign all positions he
                   holds as a director or officer of any issuer, and he is prohibited
                   from becoming or acting as a director or officer (or both) of any
                   issuer, until (and including) 1 September 2020;
                   under section 198(1)(e.3), Jones is prohibited from acting in a
                   management or consultative capacity in connection with activities
                   in the securities market, until (and including) 1 September 2020;
                   and
                   under section 199, Jones pay an administrative penalty of $50
                   000[.]

4.   In a letter dated 12 April 2011 (the Lepitre Application), Lepitre applied to the
     Commission to vary the Lepitre Sanctions to allow him "to continue to be a director and
     officer of corporations that [he] was a director and officer of before the sanction".
     Lepitre clarified before us that the seven issuers for which he seeks such variation are
     Kustom Design Professional Services Corp., Job Works Inc., Hightide Management Inc.,
     1271976 Alberta Ltd., G Productions Inc., Kustom Design Financial Services Inc. and
     Kustom Design Strategies Inc. Although a director or officer of other issuers, Lepitre
     does not seek to remain such for any issuers other than those just named.

5.   In a letter dated 13 April 2011 (the Jones Application), Jones applied to the Commission
     to vary the Jones Sanctions to allow him "to continue as a director and officer of the
     corporations he was director and officer of before sanctions were imposed", namely
     Kustom Design Professional Services Corp., Job Works Inc., 1276501 Alberta Ltd. and
     1276512 Alberta Ltd. Although a director or officer of other issuers, Jones does not seek
     to remain such for any issuers other than those just named.

6.   Section 214(1) of the Act provides that the Commission may make an order varying any
     decision made by the Commission under the Act if the Commission considers that it
     would not be prejudicial to the public interest to do so.

7.   Staff of the Commission opposed the variations, or the extent of the variations, sought in
     the Lepitre Application and the Jones Application.
Order

8.      The Commission, considering that it would not be prejudicial to the public interest to do
        so, orders under section 214(1) of the Act that the director and officer ban in the Lepitre
        Sanctions is varied by changing the order made against Lepitre under sections 198(1)(d)
        and (e) to the following:

                       under sections 198(1)(d) and (e), Lepitre resign all positions he
                       holds as a director or officer of any issuer, and he is prohibited
                       from becoming or acting as a director or officer (or both) of any
                       issuer, until (and including) 1 September 2030, except that this
                       order does not preclude him from:

                          continuing to act as a director or officer (or both) of Kustom
                          Design Professional Services Corp., provided that:

                              the company does not, directly or indirectly, through
                              directors, officers, employees, agents, contractors or
                              otherwise: issue, propose to issue, trade, distribute or deal
                              in any securities, whether of its own issue or of another
                              issuer; act as a dealer, adviser or investment fund
                              manager; or act in a management or consultative capacity
                              in connection with activities in the securities markets; and

                              the name of the company is changed so as not to include
                              the word "Kustom" or any variant thereof;

                          continuing to act as a director or officer (or both) of Hightide
                          Management Inc., provided that:

                              the sole purpose of his so acting is to administer and
                              realize on, for the benefit of its creditors, the single
                              mortgage that Hightide Management Inc. currently holds,
                              and thereafter to effect the liquidation and dissolution of
                              Hightide Management Inc.; and

                              the company does not, directly or indirectly, through
                              directors, officers, employees, agents, contractors or
                              otherwise: issue, propose to issue, trade, distribute or deal
                              in any securities, whether of its own issue or of another
                              issuer; act as a dealer, adviser or investment fund
                              manager; or act in a management or consultative capacity
                              in connection with activities in the securities markets; or

                          continuing to act as a director or officer (or both) of G
                          Productions Inc., provided that the company does not, directly
                          or indirectly, through directors, officers, employees, agents,
                         contractors or otherwise: issue, propose to issue, trade,
                         distribute or deal in any securities, whether of its own issue or
                         of another issuer; act as a dealer, adviser or investment fund
                         manager; or act in a management or consultative capacity in
                         connection with activities in the securities markets;

9.    The Commission, considering that it would not be prejudicial to the public interest to do
      so, orders under section 214(1) of the Act that the director and officer ban in the Jones
      Sanctions is varied by changing the order made against Jones under sections 198(1)(d)
      and (e) to the following:

                      under sections 198(1)(d) and (e), Jones resign      all positions he
                      holds as a director or officer of any issuer, and   he is prohibited
                      from becoming or acting as a director or officer    (or both) of any
                      issuer, until (and including) 1 September 2020,     except that this
                      order does not preclude him from:

                         continuing to act as a director or officer (or both) of Kustom
                         Design Professional Services Corp., provided that:

                             the company does not, directly or indirectly, through
                             directors, officers, employees, agents, contractors or
                             otherwise: issue, propose to issue, trade, distribute or deal
                             in any securities, whether of its own issue or of another
                             issuer; act as a dealer, adviser or investment fund
                             manager; or act in a management or consultative capacity
                             in connection with activities in the securities markets; and

                             the name of the company is changed so as not to include
                             the word "Kustom" or any variant thereof;

10.   The Commission, not being satisfied that variations of the 2010 Decision beyond those
      expressly above set out would not be prejudicial to the public interest, denies the Lepitre
      Application and the Jones Application except to the extent above specified.

26 April 2011

For the Commission:

                                                       "original signed by"
                                                 Glenda Campbell, QC

                                                        "original signed by"
                                                 Stephen Murison

								
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