VANCOUVER, June 25 /CNW/ - The British Columbia Securities Commission has
settled with John Gregory Paterson, the former president and CEO of
Southwestern Resources Corp., who admitted to fraud and illegal insider
In the BCSC settlement agreement, Paterson admitted that he committed
fraud when he entered false assay results related to Southwestern's Boka
project in China into the company's database. He also admitted to causing the
false data about the gold mining operation to be reported in 24 news releases
between March 7, 2003 and Feb. 21, 2007.
Paterson also admitted to illegal insider trading in the settlement
agreement. On July 16, 2007, Paterson sold 50,000 Southwestern shares for net
proceeds of $298,239.78, at a price of $5.96 per share. When he sold the
shares, he traded with the knowledge that Southwestern would have to issue a
news release correcting the gold assay values for the Boka project.
On July 19, 2007, the day that Southwestern announced the errors in the
previously reported assay results for the Boka project, the trading price of
Southwestern shares closed at $2.90 on the Toronto Stock Exchange. Paterson
therefore avoided a loss, on that day alone, of approximately $153,000. The
trading price of the shares continued to decline after July 19 as more
information about the false assay results became public.
As part of the settlement agreement, Paterson, a geologist, undertakes
not to act as a Qualified Person - an individual who prepares mining-related
disclosure for issuers - in his lifetime. In addition, he is permanently
banned, with limited exceptions, from trading securities or acting as a
director or officer. Finally, he is permanently prohibited from engaging in
investor relations activities or acting in a management or consultative
capacity in connection with activities in the securities market.
Paterson voluntarily contributed all of his assets in settlement of
lawsuits, and is unable to pay the approximately $3.5 million to the BCSC that
would have been required in this matter.
The B.C. Securities Commission is the independent provincial government
agency responsible for regulating trading in securities within the province.
You may view the settlement on our website www.bcsc.bc.ca by typing in the
search box, John Gregory Paterson or 2009 BCSECCOM 344. If you have questions,
contact Ken Gracey, media relations, 604-899-6577.
Learn how to avoid investment fraud at the BCSC's investor education
For further information:
For further information: Ken Gracey, (604) 899-6577 or (Canada)