IS THIS THE SAME GUY?
A L B E R T A S E C U R I T I E S C O M M I S S I O N
IN THE MATTER OF The Securities Act
S.A. 1981 c.S-6.1, as amended (the "Act")
- and -
IN THE MATTER OF Real Market Network Inc.
- and -
IN THE MATTER OF Harj Manhas
(the "Respondent")
S E T T L E M E N T A G R E E M E N T
(in respect of Harj Manhas)
1. INTRODUCTION
1.1 The Staff of the Alberta Securities Commission (the "Staff") conducted an
investigation between November, 1997 and April, 1998 into allegations
that the Respondent and others breached the requirements of the Act or
rules pursuant to the Act (the "Rules"); and
1.2 The Executive Director and the Respondent have agreed to resolve the
allegations against the Respondent in this matter based on the terms and
conditions set out herein.
2. AGREED STATEMENT OF FACTS
2.1 Real Market Network Inc. ("RMN") was incorporated under the Canada
Business Incorporations Act on May 1, 1995 and carried on business in
Alberta and elsewhere. RMN had a business office in Calgary, Alberta,
however was never extraprovincially registered in Alberta to conduct
business;
2.2 At all material times, Wayne Luepke ("Luepke") was president and a
director of RMN, and was responsible for the founding and organization of
RMN from its inception. Luepke’s role throughout was to market RMN’s
product, assist with production and solicit operating funds for RMN;
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2.3 Luepke had been a commercial realtor for several years and had
developed an extensive database of office buildings and suburban and
industrial properties. In December, 1996, Luepke sold the proprietary
system to RMN in order to further develop the database system for
commercial use;
2.4 John Lukkarinen ("Lukkarinen") became acquainted with Luepke in
December, 1996 while looking for real estate investments. Luepke
retained Lukkarinen to raise capital, to prepare financial statements for
RMN and to canvass the possibility of proceeding with a major transaction
pursuant to the Alberta Securities Commission’s Junior Capital Pool Policy
(the "JCP Policy");
2.5 The Respondent, Harj Manhas ("Manhas"), was an acquaintance of
Lukkarinen and was also interested in investment opportunities in the
junior capital markets. Lukkarinen introduced Manhas to Luepke and, in
the Spring of 1997, Manhas was retained as a project manager/facilitator
to provide corporate finance services with a view to taking RMN public.
Manhas’ retainer was $40,000, however to date he has only been paid
$5,000 for his services;
2.6 As corporate financier and project facilitator, Manhas compiled a list of
activities and deadlines to move RMN’s financing forward in a timely
fashion. He retained a securities lawyer and a business consultant to
assist in preparing RMN for a possible major transaction. At the same
time, in about January, 1997, Luepke advised Lukkarinen and Manhas
that RMN needed approximately $40,000 for ongoing business operations.
Manhas introduced several potential investors to Luepke and a number of
group presentations were made to prospective investors by Luepke,
Manhas and Lukkarinen;
2.7 In total, Manhas was responsible for recruiting at least eight Alberta
residents (the "Investors") who invested a total of $40,000 in RMN;
2.8 Between March 10 and April 15, 1997 Manhas, in soliciting and providing
information to these Investors, traded in securities of RMN without being
registered and where no prospectus had been filed therefor, all at time
when no exemptions were available to him, contrary to sections 54(1) and
81(1) of the Act;
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2.9 The Investors had no previous knowledge or connection to RMN or any of
its principals, and as such had an insufficient connection with or
knowledge of RMN to qualify them for the private company exemption
under the Act;
2.10 Manhas discovered in the Spring of 1997 that the Investors’ funds had in
fact been used to pay old debts of RMN, that Luepke had previously
raised funds from other individuals, and that several of these previous
investors were disgruntled and threatening to sue RMN. RMN’s financial
situation was worsening, and it became impossible to move forward with
the JCP process. He discontinued his involvement in RMN in May, 1997.
2.11 Manhas was specifically retained for corporate finance services in
coordinating and advancing the JCP process. He was not compensated
for recruiting the Investors.
3. SETTLEMENT TERMS
3.1 Harj Manhas undertakes not to trade in any securities and not to use any
of the exemptions available under the Act or the Rules for a period of two
months from the date of this Agreement;
3.2 Harj Manhas agrees to pay to the Commission the sum of $1,000.00 to
help defray the costs of the investigation by Staff;
3.3 Harj Manhas hereby waives any right that he may have under the Act, or
otherwise, to a hearing, review, judicial review or appeal of the matters
referred to herein.
Signed by Harj Manhas at )
Calgary, Alberta this 22 day of )
September, 1998 in the presence of: ) “Original Signed By”
) Harj Manhas
“Original Signed” )
Witness
) ALBERTA SECURITIES COMMISSION
DATED at Calgary, Alberta this )
22 day of September, 1998. ) “Original Signed By”
) H.C. Blakey
) Director, Market Standards