BCSC Executive Director's Bulletin: Securities regulator issues notice of hearing to extend temporary order against offshore bank



    VANCOUVER, Aug. 30 /CNW/ - The Executive Director of the British Columbia
Securities Commission has issued a notice of hearing to extend a temporary
order issued against a European-based bank that holds an account at a B.C.
investment dealer where suspicious trading activity took place during a spam
campaign.
    The notice of hearing states that Liechtenstein-based Hypo Alpe-Adria
Bank AG trades through accounts at various investment dealers in B.C.
    Amongst other things, the notice alleges, Hypo Bank traded a large volume
of shares of an Over-the-Counter Bulletin Board issuer through an account
during a period when the issuer's stock was part of a promotional e-mail
(spam) campaign that commission staff was tracking.
    The notice also alleges that between April 18 and May 31 of this year,
86 per cent of the same account's total market transactions of spammed
securities were sales. The notice states this activity is a potential
indicator of selling into a market manipulation.
    Hypo Bank claims Liechtenstein banking laws do not allow it to provide
the names of the beneficial owners of securities traded through any of its
B.C. accounts to any party, and commission staff have been unable to identify
the beneficial owners.
    Without knowing who the beneficial owners are commission staff cannot
effectively investigate whether they have engaged in illegal activity. In
addition, the B.C. investment dealers holding these accounts are unable to
fulfill their know your client obligations under the Securities Rules. Due to
these circumstances, the Executive Director has temporarily ordered that Hypo
Bank cease trading in and be prohibited from purchasing any securities or
exchange contracts in B.C.
    These allegations have not been proven. A hearing will be held on the
12th Floor Hearing Room, 701 West Georgia Street, Vancouver, B.C., on
September 11, 2007 at 2:00 p.m. At the hearing, counsel representing the
Executive Director will ask the Commission to extend the temporary order.

    The B.C. Securities Commission is the independent provincial government
agency responsible for regulating trading in securities within the province.
You may view notices of hearings on our website www.bcsc.bc.ca. If you have
questions, contact Ken Gracey, Media Relations, 604-899-6577.
    Learn how to avoid investment fraud at the BCSC's investor education
website: www.investright.org.





For further information:

For further information: Ken Gracey, (604) 899-6577, or (B.C. &
Alberta), 1-800-373-6393


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