Released on April 22, 2009
On April 21, 2009, a hearing panel of the Saskatchewan Financial Services Commission (SFSC) handed down its decision in the matter relating to Klaus Link and Tri-Link Consultants Inc. (Respondents).
In its decision, the panel found that the Respondents had contravened the registration and prospectus requirements in sections 27 and 58 of The Securities Act, 1988 (Act). The panel ordered that the Respondents be permanently banned from trading and advising in securities and from using any exemptions in Saskatchewan securities law. The panel also ordered the Respondents to pay an administrative penalty of $100,000 plus costs of $60,468.75.
Finally, the hearing panel determined that Respondents' actions caused financial loss to investors and ordered the Respondents to pay financial compensation of specified amounts to each of 51 investors who had presented claims to the Commission. The financial compensation orders totalled approximately $1.2 million. The Act limits financial compensation orders to $100,000 for each claimant. Five investors had losses of more than $100,000.
Investors affected by Tri-Link Consultants Inc. reside in Regina, Saskatoon, Estevan, Weyburn, Drake, Lanigan, Lumsden, Watrous, Medicine Hat, AB and North Dakota.
At a hearing on April 6 and 7, the panel heard evidence from four witnesses. It also considered an agreed statement of facts in which the Respondents admitted to trading and advising in securities while not being registered and without having a receipt for a prospectus. The Respondents also admitted to failing to act honestly, fairly and in good faith toward clients by placing them in unsuitable and high risk investments, failing to maintain registration of accounts required by the Income Tax Act, providing them with misleading account statements, using client money to pay other clients and using client funds to pay personal obligations. The Respondents also admitted that their clients had suffered financial losses of approximately $4.4 million.
"The Commission members obviously viewed the large number of investors and the large financial loss very seriously," SFSC Enforcement Branch Deputy Director Ed Rodonets said. "Their decision not only deals with this matter but sends a message to deter others from engaging in similar activity."
A copy of the Decision may be found on-line at www.sfsc.gov.sk.ca/ssc/enforcement.shtml by clicking on the "Decisions" link under the "Saskatchewan Enforcement Actions" section.
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For more information, contact:
Ed Rodonets
Saskatchewan Financial Services Commission
Regina
Phone: 306-787-5850
Barbara Shourounis
Saskatchewan Financial Services Commission
Regina
Phone: 306-787-5842