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Sales Commission Settlement Agreement

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Sales Commission Settlement Agreement Powered By Docstoc
					                           ALBERTA SECURITIES COMMISSION

                   SETTLEMENT AGREEMENT AND UNDERTAKING



Citation: Trident Properties Ltd., Re, 2010 ABASC 480                            Date: 20101015
                                                                             Docket: ENF-005235

                      Securities Act, R.S.A. 2000, c. S-4, as amended (Act)



                     TRIDENT PROPERTIES LTD. and VIMAL IYER


Agreed Facts

Introduction

1       The staff of the Alberta Securities Commission (respectively, Staff and Commission)
conducted an investigation into allegations that Trident Properties Ltd. (Trident) and Vimal Iyer
(Iyer) breached Alberta securities laws, as that term is defined in the Act, regarding illegal trades
and distributions in securities and the making of prohibited, untrue or misleading representations,
and thus acted contrary to the public interest.

2      The investigation confirmed and each of Trident and Iyer admit that they breached the
sections of the Act set out below and acted contrary to the public interest.

3        Solely for securities regulatory purposes in Alberta and elsewhere, and as the basis for
the settlement and undertaking set out in paragraph 17, each of Trident and Iyer makes the
admissions and undertakings set out below in this Settlement Agreement and Undertaking
(Agreement).

4       Terms used in this Agreement have the same meaning as provided for in Alberta
securities laws, a defined term in the Act.

Circumstances

5      At all material times, Trident was a corporate body formed pursuant to the laws of
Alberta. It purported to be involved in real estate acquisitions, sales and management.

6      At all material times, Iyer was the Chief Executive Officer and sole director of Trident.

7      After incorporating in 2007, Trident became involved in purchasing agricultural lands in
Alberta and selling undivided interests (UDIs) in these lands to investors on the premise that the
properties were suitable for urban, residential or industrial development in the near future.
Trident indicated in agreements with purchasers and in promotional material that would “manage
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and operate” the lands, that it would arrange for the annexation or rezoning of the lands and that
it would arrange for or carryout itself development of the lands.

8       Trident and Iyer admit that between April 2007 and August 2009, Trident sold UDIs in
several properties to approximately 110 Alberta investors. Trident thereby raised approximately
$6.5 million. Iyer supervised these sales, approved Trident’s promotional material and spoke
directly to UDI buyers in some cases.

9      Trident and Iyer admit that the sale of UDIs in these circumstances constituted trades in
an “investment contract” and thus in a “security” as these terms are defined in the Act.

10      Trident and Iyer further admit that neither Trident nor Iyer was registered to deal or trade
in securities pursuant to Section 75 of the Act. Further, as Trident’s trades involved securities
that had not been previously issued, they constituted “distributions” as defined in the Act. Iyer
and Trident admit that Trident never filed a preliminary prospectus or prospectus with the
Commission in relation to this distribution, nor did it receive a receipt for such a prospectus.
Trident and Iyer further admit that many, if not all, of the purchasers of the UDIs did not qualify
under any exception to the registration and prospectus requirements.

11      Trident and Iyer admit that Trident’s sale of the UDIs therefore constituted illegal
distributions of securities and that Iyer himself authorized, permitted, acquiesced and
participated in the illegal trading and distribution of Trident securities.

12      Trident and Iyer further admit that Trident’s promotional material contained inaccurate
representations regarding the location of Trident properties and the length of time required to
develop the properties, and these statements could reasonably be expected to have a significant
effect on the market price or value of the UDIs. Iyer admits he approved these promotional
materials and was aware that they were available to the public.

13      Trident and Iyer admit that Trident salespersons made inaccurate statements to investors
regarding the pace of development of the lands and the existence of agreements to sell the lands
to third parties, and these statements could reasonably be expected to have a significant effect on
the market price or value of the UDIs. Trident and Iyer further admit that Trident salespersons
also made prohibited representations regarding the future value of the UDIs. Further, Staff has
evidence to show that on at least two occasions Iyer confirmed these inaccurate representations
and prohibited representations regarding future value to investors when they talked to Iyer
personally about the Trident lands.

Breaches

14      Trident and Iyer admit that they breached sections 75 and 110 of the Act by trading and
distributing Trident securities without registering to do so and without Trident having filed a
prospectus with the Commission in circumstances where no exemption from the registration and
prospectus requirements was applicable.

15     Iyer admits that he breached sections 92(3) and 92(4.1) of the Act by permitting others to
make undertakings as to the future value of investments in Trident and by permitting others to
make inaccurate representations regarding the sale or development of Trident lands. Staff further


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has evidence to show that Iyer breached sections 92(3) and 92(4.1) by confirming these
inaccurate representations and prohibited representations regarding future value to investors
when they talked to Iyer personally about the Trident lands.

16     Iyer and Trident further admit that their activity as described above constituted conduct
contrary to the public interest.

Settlement Payments and Undertakings

17     Based on these facts and admissions, Iyer and Trident undertake to the Executive
Director upon execution of this Agreement to do the following:

        17.1   Trident and Iyer will pay to the Commission the amount of $140,000.00 in
               settlement; they will also pay to the Commission the amount of $10,000.00 to
               compensate for investigation and legal costs; Trident and Iyer acknowledge that
               they are jointly and severally liable for this obligation to pay a total of
               $150,000.00 to the Commission;

        17.2   Trident will cease trading in all securities, including UDIs;

        17.3   Iyer will resign all positions as a director or officer of any issuer and shall not
               hold such a position until the expiry of eight (8) years from the execution of this
               Agreement; however, he may remain as a director and officer of Trident merely in
               order to fulfill obligations it has to current investors under UDI sales agreements;
               while acting in this role, he cannot solicit further investment or funds from those
               who have already purchased Trident UDIs; he may also act as director or officer
               of an issuer that he wholly-owns or whose securities are issued to immediate
               family members;

        17.4   Iyer will cease trading in all securities, including UDIs, except that he may trade
               in his own account through a registrant who has been provided with a copy of this
               Agreement, or through a registered retirement savings plan or registered
               educational savings plan operated for his benefit or for the benefit of an
               immediate family member.

18    In order to fulfill their obligation under 17.1, Iyer and Trident will pay $75,000.00.00 to
the Commission before the signing of this Agreement by Staff and they shall pay the remaining
$75,000.00 by the end of business on October 29, 2010.

19      If the Commission has not received full payment by the end of business on October 29,
2010, it shall be free to continue proceedings against Iyer and Trident and Staff shall be free to
seek a higher penalty and more lengthy or severe bans than set out above. This Agreement will
be admissible at hearing as a statement of admissions, with the exception that paragraphs 17.1-
17.4 and 18 will be redacted and subject to settlement privilege.

Other Circumstances Relevant to Settlement

20      Neither Trident nor Iyer has been sanctioned by the Commission before.


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21     This Agreement has saved the Commission the time and expense associated with a
contested hearing under the Act.

Administration

22     Trident and Iyer acknowledge that they have sought independent legal advice and that
they have voluntarily made the admissions herein.

23     Trident and Iyer waive any right existing under the Act, or otherwise, to a hearing,
review, judicial review or appeal of this matter.

24      Trident and Iyer make these admissions and undertakings solely for the purpose of
proceedings relating to the regulation of securities in Alberta and elsewhere. Trident and Iyer
acknowledge that this Agreement may be referred to in any other proceedings under the Act, and
in securities regulatory proceedings in other jurisdictions. Trident and Iyer state that they do not
make these admissions and undertakings for the purpose of or for use in any other kinds of
proceedings, including criminal proceedings.

25     The Agreement resolves all issues involving Trident and Iyer as described above, and
Staff will take no further steps against them arising from these facts.

26      The Agreement may be executed in counterpart.

Signed by the duly authorized signatory      )
of TRIDENT PROPERTIES LTD. at                ) TRIDENT PROPERTIES LTD.
Edmonton, Alberta this 12 day of             )
October 2010, in the presence of:            )
                                             )
James J. Heelan, QC                          )
WITNESS NAME                                 )
                                             ) “Original Signed By”
“Original Signed By”                           Vimal Iyer
SIGNATURE
Signed by VIMAL IYER at Edmonton,            )
Alberta this 12 day of October 2010, in      )
the presence of:                             )
                                             )
James J. Heelan, QC                          )
WITNESS NAME                                 )
                                             ) “Original Signed By”
“Original Signed By”                         ) VIMAL IYER
SIGNATURE




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                                      )    ALBERTA SECURITIES COMMISSION
                                      )
Calgary, Alberta, 15th October 2010   )
                                      )    “Original Signed By”
                                      )    W.E. Brett Code
                                      )    Director, Enforcement




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