October 18, 2007 Decisions and Freeze and cease trade orders Securities

Montréal – In a decision handed down on September 26, 2007, Presiding Justice of the Peace Suzanne Bousquet of the Court of Québec (Criminal and Penal Division), district of Montréal, sentenced Robert Roy to a three-week prison term for each of the 91 charges brought against him under the Securities Act (1,911 days) by the Commission des valeurs mobilières du Québec in 1995 and an additional term of two years less one day (729 days) for one charge brought against him under the Act respecting the Ministère du Revenu by Revenu Québec (Québec Ministry of Revenue) in 1999. As well, Judge Bousquet sentenced Constantin Roy to a prison term of two years less one day (729 days) for the charges brought against him under the Securities Act by the Commission in 1995.

The decision is further to a request from the collector of fines at the Montréal courthouse to order a prison term for Robert Roy and Constantin Roy for failure to pay fines totalling $1.5 million as a result of lawsuits filed by the Commission and the Ministry.

On March 11, 1998, the Court of Québec found Robert Roy and Constantin Roy guilty of 91 violations under section 11 of the Securities Act by assisting 91 limited partnerships with the distribution, between May and November 1992, of a form of investment governed by the Securities Act, namely, investment contracts, without holding a prospectus approved by the financial markets authority. On April 8, 1998, the Court of Québec therefore ordered the two Respondents to pay a fine of $5,000 for each of the 91 violations.

Moreover, on May 21, 2002, Robert Roy pleaded guilty of making, between January 1, 1992 and May 1, 1993, misrepresentations or contributing to misrepresentations in the fiscal return referred to in section 1000 of the Taxation Act, which was filed for the 1992 taxation year. Robert Roy was then ordered to pay a fine in the amount of $500,000 and was given up to April 25, 2007 to pay the fine. However, he did not comply with the deadline. According to the collector of fines at the Montréal courthouse, a heavy fine with a deterrent impact was required because of a number of factors, including:

• The fines outstanding were substantial;
• The judgments whereunder the fines were imposed were handed down some time ago;
• To date, the Respondents have not made any payment to the collector;
• Despite steps taken by the collector, the Respondents have never taken part in any work options;
• The Respondents exploited the system and took advantage of hundreds of investors who incurred substantial financial losses.

In her decision, Judge Suzanne Bousquet pointed out that, over the months and years, the collector had taken all legal steps available to enforce the judgments handed down against the Respondents and that, if he was unsuccessful, it was as a result of their flagrant lack of co-operation as well as their delaying and evasive tactics.

The Autorité des marchés financiers (AMF) is the regulatory and oversight body for Québec’s financial sector. As for Revenu Québec, it sees to the collection of income tax and consumption taxes, while ensuring that all taxpayers and agents pay a fair share of the financing of public services.

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