Market Regulation Services Inc.

Market Regulation Services Inc.

January 11, 2006 17:55 ET

Canaccord Trader Agrees to Fine of C$15,000 Plus Costs and Disgorgement for Trading on Undisclosed Information About a Client Order

VANCOUVER, BRITISH COLOMBIA--(CCNMatthews - Jan. 11, 2006) - Dale Alfred Michaud, an agency trader at Canaccord Capital Corporation, today agreed to a fine of C$15,000 plus C$10,000 in costs after an RS Hearing Panel accepted a settlement agreement between RS and Michaud in which he admitted that on October 10, 2003 he took advantage of information about a client order before that information was made known to the market to benefit himself. This was contrary to the just and equitable principles of trade. In addition to the fine, Michaud is also required to disgorge the C$210 profit which he earned from the trading activity.

Summary of the Facts

Sometime before 11:12 a.m. PST on October 10, 2003, Michaud received an order from an investment advisor at Canaccord Capital Corp. to buy 1,000,000 shares of Georgia Ventures Inc. (GVI) at $0.15 on behalf of a number of client and non-client accounts (Canaccord Buy order). The Canaccord Buy Order was to be sent to a Jitney Dealer to be executed as an arranged cross with accounts at the Jitney Dealer. Michaud called the Jitney Dealer to place the Canaccord Buy Order at approximately 11:12 a.m.

At 11:50:12 a.m., Michaud entered a non-client day order to buy 10,000 shares of GVI at $0.16. At that time, the prevailing bid price for GVI was $0.18.

At 11:52:05 a.m., the Jitney Dealer began entering the Canaccord Buy Order. At 11:52:51 a.m., a separate dealer entered an order to sell GVI with a limit price of $0.15, which lowered the best bid for GVI to $0.15 and filled Michaud's buy order. Michaud later sold his GVI shares to realize a C$210 gain.

"When Michaud entered his buy order, he knew or ought to have known that, generally, someone would have to take out all of the existing bids between $0.18 and $0.15 before the Jitney Dealer could execute the cross at $0.15," said Gerry Halischuk, RS's Vice President, Market Regulation, Western Region. "Therefore, he knew or ought to have known that he could receive GVI shares at $0.16 if he placed an order at that price before the GVI price was moved. Michaud took advantage of information about a client order before that information was made known to the market to benefit himself. This was contrary to the just and equitable principles of trade."

About Market Regulation Services Inc. (RS)

RS is the independent regulation services provider for Canadian equity marketplaces, including TSX, TSX Venture Exchange, Canadian Trading and Quotation System, Bloomberg Tradebook Canada Company, Liquidnet Canada Inc. and Markets Securities Inc. RS is recognized by the securities commissions of British Columbia, Alberta, Manitoba, Ontario and by the Autorite des marches financiers in Quebec to regulate the trading of securities on these marketplaces by participant firms and their trading and sales staff. RS helps protect investors and ensure market integrity by ensuring all equities transactions are executed properly, fairly and in compliance with trading rules.

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