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   Biotech / MedicalGMXX - GENEMAX CORP


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To: StockDung who wrote (940)3/22/2005 1:33:27 PM
From: Mighty_Mezz
   of 978
 
Hyperbole Made Easy

Whaling had its Melville, bullfighting had its Hemingway. Limitless financial opportunity has Agora Publishing, which puts out The Oxford Club and True Wealth newsletters. Nobody writes a better investment tease. The language in which riches are promised in two recent mailings from The Oxford Club and True Wealth is so ripe and over the top it's precious.
Cleans windows, too

The Oxford Club's effort begins by appropriating every investor's most ardent fantasy: a company that cures cancer and combats terrorism. In heavy-breathing, highly misleading fashion, the mailer announces that "silver bullet that conquers nature's deadliest disease is about to 'go public.'" (This stock, I later learn, "went public" more than 40 years ago.) "Now there is only a brief window -- perhaps just weeks -- before these shares blast off." It gets better. Owning this stock will be like having "a winning lottery ticket." The pitchman, Oxford chairman James Boxley Cooke, says this "may be the best single-stock idea I've seen in my lifetime as an investor." No need to compare this stock to Microsoft because, well, it's better.

Then comes the terrorism kicker. A related company technology can screen cargo at ports or airports. At any moment, says Cooke, the company could get a big contract from the Department of Homeland Security. And when it does, "the stock won't just rise. It will look like something coming off the launch pad at the Kennedy Space Center." Intrigued -- and then some -- I send for a special report on the company. I pay $49.

Then I download the report, and I'm immediately deflated. The mystery stock is Varian Medical Systems, a fine New York Stock Exchange company with revenues of $1.2 billion, making it scarcely unknown. In fact, the stock has risen 800% since January 1999. I ask Spencer Sias, Varian's head of corporate communications and investor relations, what he thinks of Oxford's pitch. "It made me wince," he says.

I ask Sias about Varian Medical's counterterrorism prospects. "I wouldn't buy our stock because of cargo screening," he says. "Right now, we have a $20-million to $25-million business selling accelerants to companies that screen cargo. We are working on a prototype of a product that would allow screening to work without disrupting the flow of trade." Revenues from that product might not show up until 2006 or 2007, if ever.
Next idea

Okay, so you pass on Varian. The mailer from True Wealth describes something that was "outlawed for 41 years -- Now LEGAL again." No, it isn't sodomy in Georgia. The investment allegedly "launched the largest family fortune the world has ever seen." This "currency" could "return 665% in the next 12 months." And then the letter goes on to make my favorite investment claim of all time: Pay to find out what the secret currency is (I'm thinking drachmas, ringgit or yak teeth) and you can then use the secret "to make as much money as you want." Could it be a printing press?

No, the "secret currency" is gold coins, which have been "legal again" for 30 years. After paying $49.50, I'm deflated once more. Saint-Gaudens gold coins, favored by True Wealth, lost almost 80% of their value after 1989. To state the obvious, when you buy gold coins, you're speculating, not investing.

Wait, there's more. The letter says subscribers will be shown a way to buy the coins at a 30% discount, "which means you could buy today and sell tomorrow -- and pocket as much as a 30% gain." Yes, if you find an incredible sucker. Simply put, the coins are sold by dealers at a discount to their "retail price." If you can then find anyone who will pay you "retail," you're golden.

Columnist Andrew Feinberg writes about the choices, challenges and frustrations facing individual investors.

kiplinger.com

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To: Mighty_Mezz who wrote (941)3/23/2005 7:09:08 PM
From: StockDung
   of 978
 
The Coming Dollar Crash of 2005 Could Soon Break You
...Or Make You

We'll give you the Single Biggest
Trading Opportunity of 2005
(...and a stock that will skyrocket
as the dollar dives)!

Dear Investment U Reader,

I've been watching the trend develop like a roiling storm. Despite occasional pauses, the U.S. dollar had been steadily descending. In a few months, it's expected to crash and then continue to flounder for the next five years.

Alan Greenspan warns that central banks around the world are looking to diversify their holdings away from dollars.

Warren Buffett reveals that his company now has a $12 billion bet against the dollar.

The Wall Street Journal reports "a growing fear that a declining dollar could touch off nasty side effects for stocks."

What Kind Of Profits Are We Talking About?

Investors who knew exactly what to do when the dollar declined had the opportunity to chalk up gains of 89%... 124%... and 522% in as little as three months. Between February 2003 and April 2004, one stock multiplied more than 50 times, booming 5,293%.

Just imagine - had you invested $10,000, you would have gained a nest egg of $529,300 on that single investment.

Brokers are sounding alarms up and down Wall Street. Investors are wringing their hands. But The Oxford Club sees this trend not as an epic disaster but as a historic opportunity.

Over the next few weeks, currency values are going to completely unhinge, creating the Single Biggest Trading Opportunity of 2005. (And we will show you exactly how to profit from it.)

As professional investors know, with $2 trillion dollars changing hands every day, you can make the most money when there are shifts in currency values. For example, the legendary George Soros made $1 billion in a single day in 1992 by short selling the British pound, just before the government's attempt to bolster its value predictably failed.

Now I am not suggesting that you can make money the way George Soros did. Trading currency options and futures can be very risky. Instead, I am recommending a far safer way to win BIG during the Dollar Crash.

Please understand - as the dollar falls with respect to other currencies - many U.S. stocks will indeed fall with it.

But other stocks that are denominated in certain foreign currencies will BOOM. In fact, as their currencies rise relative to the dollar, you will automatically earn huge profits even if these stocks don't go up in price!

Best of all, we will help you take advantage of this historic opportunity without undue risks or complications. You won't need a foreign broker. You won't need an overseas bank account. You won't need to make intricate option moves.

Now Is The Time To Act. The Plunging Dollar Actually Makes Certain Stocks Stronger and Safer.

By August, 2004, three of the world's top-five-performing stocks were already non-U.S. based. The U.K.'s British Energy PLC had gained 364.30%. Costa Rican-based Rica Foods, Inc. jumped 360% within a year. Bermuda's Excel Maritime Carriers rose 272.10%.

And this is happening while foreign shares are a bargain compared with U.S. equities. The S&P 500 has been expensively trading at 20 times earnings, while many overseas markets are as much as 50% cheaper on an earnings basis.

In other words, if you know where to look, and if you get in early, you can acquire foreign stocks with blockbuster potential that have minimal risk. Today, they are available at costs that are remarkably low.

But Don't Count On Your Broker To Find Them.

A recent survey revealed that not one investment advisor in 40 is even talking about the opportunity to earn big profits in stocks that are denominated in foreign currencies.

But there is good news for our Investment U readers. I am prepared to send you the names of some painstakingly researched stocks that are poised to grow explosively over the coming weeks and years.

Here Is One Stock That Promises
"Profits Of A Lifetime"...

One of the stocks we are looking at is perfectly positioned to thrive as the dollar continues to descend. Its upside potential is astronomical, and yet the company is well grounded and rock-solid.

How solid? Well, imagine a company that sells more life insurance than any other in China, a country that includes more lives than any other.

This company also sells 69% of all accident insurance in its country and is one of its largest asset managers and institutional investors, earning a piece of hundreds of billions of dollars in assets, year after year after year.

In fact, its assets are so large that they accounted for more than half of all assets under management by Chinese life insurance companies.

This company sells life insurance, annuities, and accident and health insurance policies throughout China. Currently, the company has more than 48-million individual and group insurance policies.

And that number will almost certainly rise sharply in the months ahead.

How do we know?

Because it's an $18.6-billion company with a distribution force of more than 655,000 exclusive agents operating out of approximately 8,200 field offices throughout the country. (Did I say distribution force? This is more like an army.)

In the first half of 2004, its profits reached nearly $4.7 billion. And this figure will almost certainly rise sharply in the year ahead.

You can bet that management will do a good job for us, too. After all, insiders currently own 75% of the outstanding shares.

Now Imagine Earning a 40-60% BONUS
On Top of Your "Normal" Profits

Right now, the Chinese yuan is artificially pegged to the U.S. dollar. By not allowing it to "float" and rise to its true value, the Chinese government has made its exports cheaper on the world market. But this unfair policy also keeps the Chinese people impoverished with diminished purchasing power, while enriching manufacturing tycoons and the country's political elite.

According to Jim Rogers, former partner of George Soros and probably the world's most experienced foreign stock investor, the yuan revaluation is coming. "It has to."

China has already promised to let the yuan float. And this could happen any day as the country struggles to stabilize its economy.

Now, when the yuan is freed from its artificial restriction, the Chinese stock I've been talking about could bring you substantial profits even if its price goes down! On the other hand, if the stock zooms upward as we expect, you'll make even more money. Porter Stansberry, founder of Stansberry & Associates Investment Research, estimates your yuan float bonus at 40-60%.

Don't Miss What Has Been Called "One of the Best
Investment Opportunities of the Last 50 Years"

The crash of the U.S. dollar and the inevitable rise of the Chinese yuan will supercharge certain investments with extraordinary profits.

All you need are a handful of these investments. As Investment U president, Dr. Steve Sjuggerud points out, "The way people end up getting rich is by having a few major winners... and by limiting their losses."

Welcome to a World of Wealth

My name is James Boxley Cooke. I've retired now, but I'm a former executive with T. Rowe Price, one of the oldest and most respected names in the mutual fund industry.

I'm no longer in the mutual fund business, however. But I still love showing people the shortest and most direct route to achieving great wealth.

I'm talking gains that could double your wealth each and every year for the next five years at least - without putting your wealth at undue risk.

And you not only earn spectacular returns... you actually lower your risk.

This grand trading opportunity is flying completely under the radar of most U.S. investors. Even though it is earning investors annual gains of anywhere from 146% to over 5,000% - right now... as we speak!

Best of all, the profit boom fueled by the dollar's fall is in its very early stages. There's still plenty of time left. Get in now and you stand to make a substantial sum in the near future. As I said - properly positioned in this investment strategy and you can double your money every year... and build a multi-million-dollar fortune faster than you ever thought possible!

It's a Small World... and a Profitable One!

You see, currencies are like any other commodity. They rise as demand increases and fall as demand decreases. Very soon, the demand for dollars is likely to crash. And that sets us up for the Single Biggest Trading Opportunity of 2005 - and for at least five years to follow.

Here are five reasons why many experts believe the dollar will continue to fall:

Interest rates are so low that investors in other countries can get higher yields elsewhere.

A basket of goods and services in other countries around the world generally costs less than they do here at home. That means the dollar is overvalued on the basis of purchasing power parity.

The U.S. is running a massive current account deficit. Because Americans are buying billions more in imports each month than we're exporting, the demand for dollars is waning.

The falling dollar itself is a bad omen - a self-fulfilling prophecy. Investors anywhere prefer to hold investments in a currency that is rising, not falling. When you pull up a chart of the U.S. dollar the trend is decidedly negative.

And if the dollar's falling, U.S. stocks may soon follow. That's because if the U.S. dollar falls 20%, investors have to get a 20% appreciation in U.S. dollar denominated stocks just to break even! And as demand for U.S-denominated assets weakens, down goes the dollar even further.
This may sound negative for U.S. stocks and the economy. But regardless of the impact this will have at home, it also creates a monumental investment opportunity elsewhere. But we don't want to risk our hard-earned capital on wild-and-wooly currency bets. So what do we do?

We recommend investments in the safest and highest-returning alternative to U.S. stocks - foreign shares. Not just any foreign shares, of course - only the shares of the best international companies - companies that are likely to see their local currency rise against the dollar.

But the current opportunity in foreign shares goes beyond currency advantages... which is why so many of the shares of the world's best companies are soaring higher.

As I indicated earlier, while the S&P 500 is trading at 20 times earnings... and the Nasdaq trading at 37 times earnings, many overseas markets are spectacular bargains on an earnings basis.

Investors also know that the countries, which these foreign stocks call home, are less likely to be hit by destabilizing terrorist attacks. Nobody has a grudge against Denmark or Argentina, for instance...

And then there's the growth factor.

Countries like China and India are growing four and five times as fast as the U.S. economy. And its foreign companies - not U.S. companies - who are churning out most of the goods and services to meet the soaring demand.

You Know Them, You Trust Them, You Buy Their Products... And Not Buying Their Shares Has
Cost You a Bloody Fortune!

Look around your house and what do you see...

A television set made in Japan. Dress shirts woven in Taiwan. Shoes made in Italy. Coffee from Brazil. A watch made in Switzerland.

And in your driveway? A Toyota or Nissan? Or perhaps a BMW, a Saab, or a Volkswagen?

Foreign products are everywhere.

And right now a handful of the companies who make those products - as well as the foreign companies that supply them with the raw materials and essential business services - are offering us the opportunity to get very rich.

243.8% to 967.6% gains - just this past year!

Some examples...

Investors recently pocketed 243.8% gains when South African Highveld Steel and Vanadium kept hitting record 52-week highs...

Investors in Hong Kong-based Euro Tech Holdings profited 266% as the company prepared to win contracts from the People's Republic of China...

Irish neuro-science biotech company, Elan, earned investors 273.2%...

Dutch Mittal Steel Company became the world's largest steelmaker as investors reaped 319.9% (and now it's set to gain a foothold in China)...

Novatel of Canada, a manufacturer of global positioning systems, was awarded a major contract in the Galileo Space Technology Development program. Investors blasted off to 468.5% profits...

Hong Kong's Tramford International quietly provided network security and software development as their investors were wowed by a 967.6% gain.
Some of the most profitable foreign companies are those supplying the goods and services needed to support growing economies like China and India. For instance...

Chinese resin and plastics maker Sinopec Beijing Yanhua Petrochemical surged 242% in 10 months...

Another Chinese manufacturer - Aluminum Corp. of China - has been benefiting from the global boom... up 324% in just over a year...

Eastern Europe's largest mobile phone company, Vimpelcom, rose 116.7% in less than seven months...

And shares of the Asian software developer Infosys rose an astonishing 1,154% in under a year.
But even those gains are tiny compared to the profits Luxembourg's Millicom International Cellular. That company - which supplies cellular service to developing countries - soared 5,293% in just 14 months!

But that's just a sampling of the huge gains being enjoyed by markets benefiting from burgeoning growth and the flow of money from U.S. devalued assets.

Many more are companies you know well.

United Kingdom's Rolls Royce Group has jumped 199% in less than 10 months...

Swedish cell phone giant Ericsson is up 331% on the dollar's woes in less than a year...

The British office equipment firm, Danka Business Systems, rose 492.7% in 13 months.

Consumer electronics giant Sony jumped 371% in 13 months. Its competitor, Hitachi, rose 299.7% in 15 months.
As you can see, these international companies are hardly "foreign" at all. You and others buy their products everyday.

Why These Profits Are Happening Right Now

And clearly there is money to be made in these markets. Especially now. Why?

Reason Number One; money tends to flow to international markets when the U.S. investments and the U.S. dollar are less attractive... like now.

Reason Number Two; foreign shares are breathtakingly cheap compared to U.S. stocks. Whether you're looking at sales, earnings, book value or dividends, foreign shares are a bargain compared to U.S. stocks.

Reason Number Three; all these companies are denominated in other currencies... currencies that will rise as the dollar continues to decline. That means you can make money on these investments, even if the share price stays the same - or falls slightly!

Here's what I mean:

Say you use your U.S. dollars to buy a Swiss company's stock that's denominated in Swiss francs - and the dollar declines 20% against the Swiss franc. You've made a 20% profit... even if the stock doesn't budge in price. Even if the stock price falls 10% - you're up 10% because of the currency appreciation...

That's pretty nice in itself...

But here's what's happening. More and more savvy investors are seeing this opportunity. And they're dropping their U.S. denominated investments in favor of better-valued stocks held in stronger currencies. That's driving the stock prices higher too.

These "double whammy" gains could make you very rich...

You get the benefit of the currency appreciation... and you get stock appreciation as more and more money finds its way to these once ignored and therefore vastly undervalued equities!

Add to the mix a number of global economies that are showing renewed signs of growth and prosperity and you have a recipe for outstanding profits.

Best of all, there is a way to make your move easily... with the right information.

Let me clue you in right now.

Meet the Leader of Your International Expedition

You don't have to pay big commissions to buy international companies. You're going to learn a way to buy these shares for only $5 a trade.

And you don't have to cover spreads the size of the Sears Tower. You're about to meet someone who will show you how to do an end run around them.

And you can also forget about learning German or French in your spare time to read those annual reports. You're about to ally yourself with someone who knows those reports forward and backward.

His name is Alexander Green. Currently, he's the Investment Director for The Oxford Club, a private financial fellowship of more than 60,000 members around the world.

Mr. Green is perhaps the most capable man in the U.S. to lead you on this journey. He has spent more than 15 years as a research analyst, investment advisor and registered portfolio manager for an international investment firm. He's traveled to the four corners of the planet… and has investment contacts around the globe.

Most importantly, he knows international markets like no one I've ever met. And he can smell opportunity a continent away. And his winning record on the global stage speaks for itself.

Let me give you just a few examples.

A Long History of International Gains

After the terrorist attacks in September 2001, he watched closely what happened in international markets. After all, this was an attack on the U.S. And most of the economic fallout would be at home.

He immediately recommended shares of Wal-Mart de Mexico, the largest retailer in Mexico (51% owned by Wal-Mart). Although the shares had dropped precipitously, he knew that this company was responsible for a large portion of Wal-Mart's international sales. He also knew that since the company offers a much bigger selection and better prices than any of their competitors, business was unlikely to drop off.

His recommendation played out just as he expected. And the shares soared 72.2% in just five short months.

This was hardly extraordinary. As an international money manager, Alex has been capitalizing on situations like this for almost two decades.

Clients of his were astounded, for instance, when he recommended shares of the Hong Kong Shanghai Bank (now HSBC Holdings). And they climbed more than 600% in the months that followed.

Similarly, he wrote a special report to clients of this international firm urging them to buy shares of Israeli software developer Checkpoint Software. Just before the shares rose 1,120% in a matter of months.

He has continued these good works for members of The Oxford Club.

A couple years ago he witnessed the collapse of the currency in South Africa, the rand. And he knew, then as now, where there is a crisis there must be an opportunity. As a result, he led a financial expedition to South Africa.

Sure enough, the country itself was an economic basket case, with huge social, political and economic problems. In fact, he concluded that the problems were so bad that the currency was likely to continue to cave in.

That meant exporters who took in their revenues in dollars and paid their expenses in the local rand would make a windfall on the currency exchange rates. And it was a virtual certainty those shares would fly.

So he recommended two export-oriented mining companies to capitalize on the situation.

The first was the country's largest exporter of platinum, Anglo American Platinum. Over the space of just five months, the shares rose 73%.

But his other, even safer, investment recommendation was ASA, a publicly traded fund that held only South African mining shares. Sure enough, after he recommended the fund the share price rose 129% in just 13 months. During the biggest bear market in the U.S. since The Great Depression, I might add.

He has also scored big with the world's largest food maker, the Swiss company Nestle. And with China's largest independent power producer, Huaneng Power. And with the world's largest commodity firm, Australia's BHP Billiton.

And with the fall of the dollar imminent, he recommended Oxford Club members invest in a pair of Templeton Emerging Market Funds that would benefit. And benefit they did. In 2003 alone, The Emerging Market Fund rose 88.9% and the Templeton Dragon Fund soared 101.9%.

It's no accident that some of Alex's best recommendations involved global markets. After all, over 72% of the best profit opportunities of the last 10 years have been with companies located outside U.S. borders.

By ignoring the global market place, you're missing out on three out of every four of the best stock opportunities. In fact, the most common and costly mistake American investors make is to assume the biggest profits will always be found in our own back yards... and that there's no other legitimate place to get rich.

That's simply not the case.

And not opening your eyes to all the profits the world has to offer can cost you millions in your lifetime.

But that's about to change...

Your Passport to Riches

Alexander Green, in my opinion, is arguably the very best international trading advisor in the United States. And now he's providing a unique trading service for individuals who are willing to look outside of U.S. borders... who appreciate the economic effects and realities of a declining U.S. currency... and who are looking to lock in substantial gains in a very short period of time.

It's called The International Trader Alert.

His expertise, in-depth research, and special global contacts uncover the handful of international companies that have enormous upside potential.

Easier Than You Ever Imagined!

Every recommendation is a company based outside the U.S. and denominated in another currency. He will show you exactly how you can buy these stocks through any broker.

In other words, as a subscriber, it won't take even the slightest extra effort or expense than if you purchased any U.S.-listed stock.

His updates will come at least once a week, advising you what to buy, how long to hold, and exactly when to sell, using his proprietary "laddered stops" to both protect your profits and your principal. This keeps your risk very low.

By subscribing to The International Trader Alert, you're about to learn how to become very rich in a short period of time.

Investment Bonuses for 2005…and Beyond

Not only did most markets outperform the U.S. market on a straight percentage basis in 2004, but when you add in the benefit of translating your gains back into dollars… your returns are given an additional - and often, substantial - bonus.

Investing in the S&P 500-stock index in the U.S. would have netted you under 9% this past year. Coincidentally, the Dow Jones Index of 600 European companies rose a similar amount, 9.5% in local terms but nearly double that - 18% - in dollar terms.

Investors in Austria, Europe's best-performing market, were certainly thrilled with the 55.61% increase they experienced. But for U.S. investors who switched their funds back to U.S. dollars at the end of the year, the return jumped to 67.96% - a 12.35% improvement.

South African market participants had an excellent year, gaining 28.12%. But U.S. investors who ventured into the market reaped 52.17% - another near doubling of the return - a full 24.05% better.

With the U.S. dollar still struggling and international markets so cheap, the profit potential for subscribers is greater now than ever. The exodus of wealth from U.S. denominated currencies is fueling a bull market in international company stocks like we haven't seen in decades.

The simple fact is that, when the dollar is weak, returns in most foreign currencies are enhanced when translated back to dollars.

You don't get these types of gains without many companies earning triple-digit returns - like the ones I've shown you in this letter. But what's more shocking than the profits these non-American interests generated is the fact that most U.S. investors weren't even aware of them!

What may even surprise you more is that from 1997 to 2004, U.S. markets failed to make the global top five in any year...

But how could you have known about what was happening abroad? The mainstream media - knowing the majority of its readers and viewers don't care what happens outside our borders - barely report it.

And let's face it. Your broker or financial advisor isn't equipped to give you the advice you need to take advantage of this historic opportunity.

Your Very Own Link to the Best Global Opportunities

Alex looks for "momentum-driven" stocks - stocks where revenues, earnings, and a long list of other fundamental factors are moving higher at a substantial rate - and where the growth has been consistent over several consecutive quarters. He also looks for opportunities where a company's bottom line profits will benefit from a weak U.S. dollar. And right now the waters teem with companies that do just that.

Besides the Chinese insurance company I mentioned earlier, he will give you many other investment "Shooting Stars" that could double your money in the coming year.

These 3 Shooting Stars Are Only
the Beginning of What Could Be the
Biggest Trading Opportunity of a Lifetime.

Shooting Star #1: Canadian Transportation Company on the Move

This stock has already zoomed 35% upward over the past 52 weeks, and according to our researchers, sales are likely to climb in the months ahead. For the last nine reported months, the company already posted double-digit growth in both revenues and net income. Operating margins top 32%. Best of all, earnings are expected to accelerate even more as the company gains market share and saves from lower labor costs. Before this happens, jump aboard to double your money.

Shooting Star #2: Russian Mobile Cellular Communications Giant with Connections

This company already has about 34 million subscribers. Earnings are expected to grow 25% annually for the next five years and the company is expected to report $2.75 earnings per share for 2004. Others are beginning to take notice - according to Forbes, this company has experienced one of the world's biggest jumps in "guru" holdings. To double your money, better dial in fast.

Shooting Star #3: South African Oil and Gas Group with Global Power

This group has spread to 23 other countries. It pays a nice dividend, has a low PE ratio of 14.85, and as I write this letter, its share price just hit an all-time high. Most significantly, they're involved in a giant share-for-share transaction agreement with several other companies that are expected to be approved by competition authorities in South Africa and the European Union during the first half of 2005. For you, timing could not be better for doubling your money.

Please keep in mind that these are but a few of a long list of international companies poised to reward investors with fat profits in the months and years ahead. The International Trader Alert is the only service dedicated to making sure you know about them - and that you're in them before they enjoy their biggest gains.

And Alex gives you two ways to profit. One's a conservative approach where you buy and own the stock outright. Or, if you'd prefer a more speculative play, he'll recommend a well-positioned option play when possible. That's when the profits can really mount up. For instance, Taro Pharmaceutical recently returned over 1,000% on the stock in a year. But a few well-timed option trades could have turned $5,000 into over $95,000... in about nine months!

The international markets are a proverbial gold mine of opportunity - littered with stocks like our Chinese insurance company that are on the verge of producing huge "breakout" profits for those savvy enough to strike while the iron's hot.

No wonder that, as reported in the Wall Street Journal, 75% of the new mutual fund money went to international funds in January, 2005.

That's why it is so urgent that you get on board now. The International Trader Alert features precisely the kind of fast-moving international stocks that can quickly double and triple your investment.

Here's how our service works...

As a subscriber, you will be notified by an "instant alert" as soon as Alex sees that a stock is ripe for the picking. You'll know what's driving the opportunity, what price to buy it at, how and where to buy it, when to sell it, and what the profit potential is. And if you want to speculate, he'll include an option recommendation - when and if a good opportunity presents itself.

These plays move quickly - as do the gains- so the service will be provided by e-mail or fax. You then relay the recommendation to your broker and the trade gets executed. The whole process takes a matter of minutes.

Besides the "arrive anytime" alerts you'll get a summary (also by e-mail or fax) at least once a week updating you on the current status of each recommendation.

Plus, as an International Trader Alert subscriber, you'll also get a direct access phone number to our VIP trading desk, headed by Alex's research associate, Chris Matthai. Use it anytime you have a general question about a stock we're recommending, finding a discount broker, background research, company news, or questions relating to Club services. Please understand that while we provide investment recommendations, we are not licensed by the Securities and Exchange Commission (SEC) to provide individual investment advice, and therefore, cannot address your personal circumstances.
As with other VIP services, enrollment will be conducted on a first-come, first-served basis. The cost to join The International Trader Alert is $1,250 per year - a terrific value when you consider the kinds of returns this service has produced.

Stop Anytime for a Full, Pro-Rated Refund

If you'd like to stop receiving The International Trader Alert at any time, just let us know by mail, phone or e-mail. We'll issue you a full pro-rated refund for any unused months left on your subscription.

Reserve Your Spot Today

Because we expect we'll see-an over-subscription and then a waiting list for this service, enrollment will be limited.

Let me assure you that Alex does not divulge the names of companies he is researching prior to recommending them. The effectiveness of this service is due in large part to the speed and confidentiality of the recommended trades. As editor of The International Trader Alert, his loyalty is to his subscribers.

Join us today, and Alex' next profitable recommendation could be in your hands tomorrow.

Click here to ensure a reserved spot in this remarkable trading service.

I look forward to welcoming you on board!

Sincerely,

Chairman, Board of Governors
The Oxford Club

P.S. Please don't miss taking advantage of the historic currency upheaval that has created the Single Biggest Trading Opportunity of 2005. The Chinese life insurance stock I talked about earlier is but one of several on the cusp of enormous growth. To secure one of the remaining spots available in this service or to let us answer any questions you may have - simply click below.

Click Here to Subscribe Now

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From: StockDung4/10/2005 7:28:45 PM
   of 978
 
Investor Communications International, Inc. Announces Corrections To Inaccurate and Biased Reporting Conducted by Investrend Communications, Inc.Wednesday January 22, 6:30 am ETBLAINE, Wash., Jan. 22 /PRNewswire/ -- Investor Communications International, Inc. ("ICI") -- A FinancialWire entitled, "A Tangled Web for Rebellious Small Companies" dated January 21, 2003, and produced by Investrend Communications, Inc. ("Investrend") is biased in content and contains numerous inaccuracies. Inaccuracies in the Investrend FinancialWire include: incorrect ownership information relating to Investor Communications International, Inc. contrary to information in current SEC filings made by GeneMax Corp., incorrect information on analyst coverage of various companies conducted by Investrend, incorrect information regarding the requirement of certain SEC filings, incorrect analysis relating to earnings and expenditures of GeneMax Corp., incorrect insider/non-insider ownership information of GeneMax shareholdings, and the incorrect identity of the President of GeneMax Corp., amongst other facts. Confusion is furthered in the FinancialWire of Investrend by pointing the reader to other inaccurate articles written by Dow Jones News Wires, instead of utilizing the current and accurate SEC filings made by the companies. ICI alleges the Investrend FinancialWire taken as a whole, provides the reader with incorrect facts, faulty commentary and sensational comments intended to mislead, as well as faulty innuendo that erroneously create a sense that there is something wrong with some or all the companies that are associated therein -- all this from a supposedly reputable reporting source. The Investrend FinancialWire goes on to indicate that Hadro Resources, Inc., and its analyst coverage was discontinued for reasons other than those that are real. Investrend fails to advise the reader that Hadro Resources, Inc. has had numerous disagreements regarding the accuracy and quality of Investrend work product with respect to Investrend's analyst coverage. Hadro Resources, Inc. was in the process of internal restructuring commensurate with a change in business direction as reported in current SEC filings, when Investrend insisted on distributing their inaccurate analyst report, even though Hadro Resources, Inc. advised Investrend that it would mislead the public. Investrend, with knowledge that they were producing inaccurate information, distributed analyst reports that contained again, erroneous information, all for the sake of keeping with an Investrend publishing schedule. Analyst, Jonathan Kolb, CFA, indicated his understanding of Hadro Resources circumstances and requirement at the time. Mr. Kolb stated his willingness to wait until public disclosure of relevant facts yet to be finalized were disclosed publicly, but was overridden by Investrend CEO Gayle Essary with respect to the decision to release the erroneous information. Investrend proved impossible to work with after that point, and the Hadro Resources, Inc. dispute with Investrend remains unresolved. Grant Atkins, a consultant to ICI commented, "It is disheartening to see a company like Investrend, that allegedly provides fair reporting and analyst coverage as a mainstay of its business, exhibit biased reporting and disseminating inaccurate facts, fuelled by a questionable agenda," Atkins adds, "Biased and inaccurate reporting by media sources can only undermine the public's trust." A group of OTC bulletin board listed companies that have exited the Depository Trust Corporation ("DTC") system have subsequently been the target of a media campaign that questions the validity and legality of this procedure. These companies began exiting the DTC system in 2002 due to its inability to provide authenticity of actual shares trading, allowing for illegal naked short selling trade abuses. The growing group of companies confirmed the precedence for the use of this method and support by all governing bodies concerned. The group of companies that have opted out of electronic share ownership via the Depository Trust Corporation in favor of actual share certificates includes GeneMax Corp. (OTC Bulletin Board: GMXX - News), Hadro Resources (OTC Bulletin Board: HDRS - News), Vega Atlantic Corporation (OTC Bulletin Board: VATL - News), Ten Stix, Inc. (OTC Bulletin Board: TNTI - News), and Intergold Corp. (OTC Bulletin Board: IGCO - News) amongst others.
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Under a naked short sale of stock, short positions are not declared, shares are not borrowed to cover the short sale, and shares are sold without delivering the stock to the purchaser. Naked short selling results in the undermining of real shareholder ownership by naked short sales of stock and resulting failed deliveries of real certificates that artificially inflate share ownership and devalue the trading prices of shares in the marketplace. Unscrupulous brokers and market makers may conspire to manipulate and devalue the price of securities in this way. News wire media targeting the group can mislead the investing public and do not address the real underlying concerns, namely that the 3-Day Settlement System in the U.S. does not have integrity: The basis for moving to a certificate only share transfer system has nothing to do with short selling but instead with "naked short selling" where shares sold are never borrowed, never delivered by the seller, but where the seller collects money for the stock they never delivered in three days. The three days settlement system run by the National Securities Clearing Corporation ("NSCC") does not ensure that shares that are sold in a transaction are ever delivered. This takes place routinely in the U.S. Securities industry. Shareholders purchasing shares in the United States do not often understand that even though their broker will take their money and fill their order for a share purchase, shares are routinely not delivered to the broker on behalf of the client. The client in most cases never knows that share delivery abuses are taking place as they do not normally take delivery of their actual share certificates. It's important to note that the NSCC no longer guarantees at their website that a trade will be conducted within the three day settlement process. The money gets settled in 3 days, but the stock is routinely not delivered, and a process of "kited" or failed buy-in's can occur. In a "buy-in", the stock not delivered to the purchaser in the original naked short sale transaction is supposed to be re-purchased at arm's length from other bonifide sellers of real share certificates, and the cost of the stock "bought in" charged back to the original broker who sold the stock naked short. However, buy-in's are routinely conducted without adhering to real market dynamics; shares "bought in" are purchased from non-arm's length parties in the marketplace, or are purchased at a share price that has been manipulated lower by dilution from repeated naked short sales, or non-existent shares are purchased from other naked short sellers that do not own real shares. The buy-in that is intended to rectify the original naked short sale of stock often results in a further failed delivery of real share certificates. Cooperating broker dealers in naked short sales of stock will repeat this failed buy-in process over and over again to circumvent share delivery rules so that real certificates are never obtained for the purchasing client in a naked short sale transaction. The process of repeated failed "buy-in's" relating to a naked short sale is known as "kiting" and allows unlimited supply of non-existent stock to flood the marketplace to provide an unfair market for the shares transacted (more supply than demand and lower share prices). Kiting of buy-in's on the stock not delivered is a circumvention of the 3-day settlement rule discussed above. Another abuse used to circumvent share delivery and buy-in's is known as "pairing off." This is a process where brokerages who have numerous naked short share transactions of buying and selling between each other elect over a period of time to settle up the difference in amounts owed in cash. In this manner shares are never delivered in any of the transactions between the brokerages and the buy-in process is circumvented completely. In these circumstances, the 3-day settlement system with respect to share deliveries is non-existent as brokers elect to transfer no shares. At a time when initiatives to automate electronic trading systems in America further are contemplated by certain groups, certificate only transfer system highlights the nature and scope of rampant trading abuses in our securities trading and clearing systems. Shareholders purchasing shares have no idea that the stock they are buying is routinely not delivered notwithstanding that they have paid for it. As shares purchased by a shareholder only are listed as a line item on their account statement with their broker, they are none the wiser. Investor Communications International, Inc., a private firm from Washington State has been working with Global Securities Stock Transfer, and is in the process of contacting all OTCBB issuers to obtain their support to lobby Congress on these issues. SAFE HARBOR STATEMENT
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THIS NEWS RELEASE MAY INCLUDE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE UNITED STATES SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED, WITH RESPECT TO ACHIEVING CORPORATE OBJECTIVES, DEVELOPING ADDITIONAL PROJECT INTERESTS, THE COMPANY'S ANALYSIS OF OPPORTUNITIES IN THE ACQUISITION AND DEVELOPMENT OF VARIOUS PROJECT INTERESTS AND CERTAIN OTHER MATTERS. THESE STATEMENTS ARE MADE UNDER THE "SAFE HARBOR" PROVISIONS OF THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND INVOLVE RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN."

66.102.7.104

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To: Mighty_Mezz who wrote (941)4/27/2005 9:43:25 PM
From: StockDung
   of 978
 
JAMES DALE DAVIDSON LOL->Our directors bring a wealth of knowledge, contacts and experience to St. George’s Trust Company.

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Our directors bring a wealth of knowledge, contacts and experience to St. George’s Trust Company.

Donald P. Lines OBE, FCA, JP
Donald Lines was President and Chief Executive Officer of The Bank of Bermuda Limited until his retirement in 1994. Leaving his position as a partner with Price Waterhouse in Canada, Mr. Lines joined the Bank of Bermuda in 1969. In addition to his role in the development of the bank’s network of offices around the world, Mr. Lines was responsible for the creation of Bermuda Trust Company Limited and acted as Senior Trust Officer for many years. He continues to serve as a personal trustee of a number of trusts of substantial fortune and complexity. He also serves as Chairman of Bermuda Home, a director of The Bank of Bermuda Limited and a number of other public and private companies.


Jane M. Collis LLB
Mrs. Collis is a graduate of the University of Toronto, Trinity College and the University of London, University College. She was called to the Bar of England and Wales in 1990 and to the Bermuda Bar in 1992. Prior to assuming the position of Managing Director of St. George’s Trust Company Limited, Mrs. Collis practiced as an attorney with the firm of Appleby, Spurling & Kempe, where she specialized in trusts and private client matters.

James D. Davidson
Mr. Davidson is Founder and General Partner of Carpathia Capital, a private placement fund, Director of CLSI Solutions, Inc., a Baltimore based money management firm and Principal and Director of Strategic Advisors Overseas Ltd. of Bermuda. He is Director of Pickering and Chatto Publishers, Ltd. and founder of Angora Publishing of Baltimore. As a publisher and co-editor of Strategic Investment, he has guided the newsletter to its present recognition as one of the world’s best performing. He has authored several books and is the Founder and Chairman of National Taxpayers Union, one of America’s foremost public interest groups. He received his M. Litt. from Oxford University, where he presently serves as a director of the Pembroke College Foundation.

The Honourable Robert Lloyd George
The Honourable Robert Lloyd George is Chairman and Chief Executive Officer of Lloyd George Management Limited, an investment management company based in Hong Kong and specializing in Asian equities. Pursuing a career in banking and investment, Mr. Lloyd George spent four years with the Fiduciary Trust Company of New York and was Managing Director of Indosuez Asia Investment Services Ltd. from 1984 to 1991, prior to establishing Lloyd George Management. Educated at Eton and Oxford, Mr. Lloyd George is the author of numerous published articles and several books.

Raymond Doré CA
Mr. Doré is the President and Chief Executive Officer of The Mutual Trust Company, a wholly owned subsidiary of Mutual Life of Canada, where he has served in such capacity since 1981. He is a chartered accountant and held the positions of Treasurer of Commercial Trust Company Limited in Montreal from 1965 to 1974, Vice President of Mercantile Bank of Canada from 1975 to 1977 and Chairman of the Board of the Merchant Trust Company Limited in 1978.

Lord William Rees-Mogg
Lord William Rees-Mogg is an investment advisor and author of international reputation. He serves as a director of Strategic Advisors International, LLC., Rothschild Investment, Ltd. and The Private Bank and Trust Company, Ltd., a London-based bank dealing with private banking services. He has also served as Vice-Chairman of General Electric Company, Ltd., Chairman of the Arts Council of Great Britain, a proprietor of Pickering and Chatto Publishers, Ltd., and co-founder of the newsletter Strategic Investment. Lord Rees-Mogg was the Chief Writer and Assistant Editor in London of The Financial Times and The Sunday Times and Editor of The Times. A graduate of Balliol College, Oxford, he was knighted be the Queen of England in 1981.

Susan D. Wilson CA
Ms. Wilson is a chartered accountant, President of Masters Limited and serves on the boards of both Bermuda Management Holdings Limited and Bermuda Computer Services Limited. She is a former government auditor, has served on many committees of the Institute of Chartered Accountants of Bermuda and is a member of the Permanent Panel of Arbitration for Essential Industries of Bermuda.
Brian N. Lines

Brian Lines is President of Lines Overseas Management Limited. He is a graduate of the University of Guelph, Canada and spent seven years as a stockbroker with Midland Walwyn Inc. in Toronto, Canada, advising both private clients and institutions on the North American equity markets, before returning to Bermuda to found Lines Overseas Management.

Scott G.S. Lines
Scott Lines is Managing Director of Lines Overseas Management Limited. Mr. Lines is a graduate of the University of Toronto, Canada and from 1987 to 1992, served as a fund manager with the Bank of Bermuda Limited in London and Bermuda, having responsibility for the management of European portfolios. Mr. Lines left the Bank of Bermuda to found Lines Overseas Management.

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To: Mighty_Mezz who wrote (941)4/27/2005 10:00:28 PM
From: StockDung
   of 978
 
L.O.M. has close links and an interest in St. George's Trust Company Limited, the oldest independant trust company in Bermuda, now licensed to offer trust services to the public in Cayman. Through its in-house expertise and associations with leading on-shore tax advisors and asset protection specialists, St. George's Trust Company is able to create a trust structure to meet each client's individual needs.


Waterstreet Corporate Services Limited offers a complete suite of incorporation and corporate administration services through the Bermuda office, and in association with contacts in other offshore jurisdictions. This includes arranging the incorporation of a private company in Bermuda, Grand Cayman, the Bahamas, the British Virgin Islands, and many other offshore jurisdictions.

Oceanis is the most technologically advanced and secure offshore financial centre in the world. Based in Bermuda and the Cayman islands, the Oceanis group of companies includes investment services; asset managers; decision support materials; and advisors with elite backgrounds in organizing and securing profitable investment returns. Oceanis provides a number of features designed to help you navigate through the complicated world of international asset protection and investment.

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To: Mighty_Mezz who wrote (941)4/27/2005 10:29:08 PM
From: StockDung
   of 978
 
What can St. George’s Trust Company Limited offer you?

Working with your legal advisors to ensure tax efficiency in your home jurisdiction, we can create a structure to meet your personal needs. Such structure may involve the establishment of a fixed interest, discretionary, purpose, or pension trust and the incorporation of one or more investment holding companies in Bermuda or other offshore jurisdictions. It might warrant the incorporation of a private trustee company to administer to the exclusive needs of your family. You may wish to appoint St. George’s Trust Company Limited as executor of some part of your estate. Whatever form the structure ultimately takes, St. George’s Trust Company Limited will see to the administration of all trust components while corporate administration will be handled through our sister company, Waterstreet Corporate Services Limited.

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To: Mighty_Mezz who wrote (941)4/27/2005 10:42:49 PM
From: StockDung
   of 978
 
REMEMBER GENIE AND TRAVELBYUS PR? web.archive.org

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To: Mighty_Mezz who wrote (941)4/27/2005 10:44:43 PM
From: StockDung
   of 978
 
DON'T GO OFFSHORE WITHOUT IT web.archive.org

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To: Mighty_Mezz who wrote (941)4/27/2005 11:03:58 PM
From: StockDung
   of 978
 
"YBM's other experienced director with an acceptable track record upon the
JCP being listed is Kenneth Davies, a citizen of the world identified by
the company as "Principal Montello Resources Ltd.""
Message 20028083

=====================================================

LINES OVERSEAS MANAGEMENT LOL

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Mission Statement
Company History
Company Profile

Montello Resources Ltd. is a public company that trades on the Alberta Stock Exchange under the trading symbol MEO. We have large land positions in both the Peace River area next to Ashtons recent Kimberlite discovery and an exciting property near Hinton, Alberta. Over the past three years we have been active on our Hinton property tracking down the source of the 24 diamonds that we found. The 147 magnetic anomalies - initially identified on our two million-acre property by an airborne magnetic survey - have been thouroughly examined and narrowed down to 21 targets that appear to be some type of intrusive. Our $8 million joint venture partner, Kennecott Canada Ltd., has been analyzing these targets and is excited about the possiblity of finding the source of our diamonds. Kennecott has even referred to these targets as "Kimberlite-like pipes." Kennecott has already started an extensive drill program that will test these anomalies to see if they are indeed the source of Montello's gem quality diamonds.




SUMMARY OF EVENTS LEADING UP TO THE DRILLING

April 1994
Acquire 950,000 acres in Hinton, Alberta area.
July 1994
Diamonds found in surface sample.
Aug 1995
Chuck Fipke visits the property and takes more samples for his laboratory.
Jan 1995
Chuck Fipke finds diamonds, chromites and other indicator minerals in samples.
Jan 1995
Airborne Magnometer readings identify numerous anomalies
Oct 1995
Kennecott Cnada Ltd. joint ventures for $3,000,000 to earn interest in 230,000 acres.
Oct 1995-present
Extensive geochemical and geophysical work conducted by Kennecott on anomolies.
May 1996
Kennecott announces after detailed ground work program, anomolies narrowed down to 11 Class "A" anomolies.
Montello stakes additional land surrounding original claims.
Aug 1996
Kennecott joint ventures additional 1,138,000 acres for an additional $5,000,000.
January 1997
Kennecott commences drilling on the Kimberlite-like anomalies..
January 1997
Montello stakes 600,000 acres in the Buffalo Hills area of Alberta next to Ashtons Kimberlite field.
February 1997
Montello stakes 3.4 additional acres next to Ashtons kimberlite field discovery

Company Profile
Corporate Headquarters:
Suite 1473 - 595 Burrard Street, PO Box 49057
Vancouver, BC, Canada V7X 1C4
Phone: 604-689-1799/1-800-268-2636
Fax: 604-689-8199
Email: ppower@axionet.com
Incorporated:
02-MAY-86
Province of British Columbia Capitalization:
Authorized: 100,000,000 common shares
Issued: 29,000,000 common shares
Approx Float: 10,000,000
Share Prices:
Registered:

Listed:
ASE
Trading Symbol: MEO
CUSIP # 612382109/451277 For Investor Relations Call:
Thomas
Phone: 604-689-1799
Email: ppower@montello.com
Transfer Agent:
Montreal Trust Company - June P. Glover, Acct Mgr
510 Burrard Street, Vancouver, BC V6C 3B9 Barrister & Solicitor:
Godinho, Sinclair - Bruce Bragagnolo
10th Floor, Montreal Trust Centre, 510 Burrard St., Vancouver, BC V6C 3A8
Phone: (604) 689-9930
Fax: (604) 689-9940
Email: bb@axionet.com
Directors and Officers:
Patrick Power, President & Director
Jeannine Davies, Secretary & Director
Daniel Power, Director Auditors:
Rob Charlton
#1088 - 999 W. Hastings St., Vancouver, BC V6C 2W2
Phone: (604) 683-3277
Fax: (604) 684-8464
Management:
Patrick Power
Jeannine Davies
Ken Davies


--------------------------------------------------------------------------------
1997 Montello Resources Ltd. . All rights reserved.

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To: Mighty_Mezz who wrote (941)4/27/2005 11:07:36 PM
From: StockDung
   of 978
 
YBM MAGNEX INTERNATIONAL INC.,

IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, c.S.5, as amended

AND

YBM MAGNEX INTERNATIONAL INC.,
HARRY W. ANTES, JACOB G. BOGATIN, KENNETH E. DAVIES,
IGOR FISHERMAN, DANIEL E. GATTI, FRANK S. GREENWALD,
R. OWEN MITCHELL, DAVID R. PETERSON, MICHAEL D. SCHMIDT,
LAWRENCE D. WILDER, GRIFFITHS MCBURNEY & PARTNERS,
NATIONAL BANK FINANCIAL CORPORATION
(formerly known as First Marathon Securities Limited)






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IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, c.S.5, as amended

AND

YBM MAGNEX INTERNATIONAL INC.,
HARRY W. ANTES, JACOB G. BOGATIN, KENNETH E. DAVIES,
IGOR FISHERMAN, DANIEL E. GATTI, FRANK S. GREENWALD,
R. OWEN MITCHELL, DAVID R. PETERSON, MICHAEL D. SCHMIDT,
LAWRENCE D. WILDER, GRIFFITHS MCBURNEY & PARTNERS,
NATIONAL BANK FINANCIAL CORPORATION
(formerly known as First Marathon Securities Limited)

STATEMENT OF ALLEGATIONS OF STAFF OF THE ONTARIO SECURITIES COMMISSION

Staff of the Ontario Securities Commission (the "Commission") make the following allegations:

I. The Respondents

1. YBM Magnex International Inc. ("YBM" or the "Company") was incorporated on March 16, 1994, in Alberta, Canada as Pratecs Technologies Inc. On October 5, 1995 the Company changed its name to YBM. YBM became a reporting issuer in Ontario on January 22, 1996. YBM shares were listed and posted for trading on The Toronto Stock Exchange on March 7, 1996. On May 13, 1998 the Commission issued a temporary cease trade order in respect of YBM shares, which order remains in effect. On December 8, 1998, pursuant to an order of the Court of Queens Bench of Alberta, a Receiver was appointed respecting the present and future assets, property and undertaking of YBM.

2. During the period May 1, 1996 to May 13, 1998 (the "material time"), there were eight members of the YBM Board of Directors (the "Directors"), two of whom were officers of the Company. The remaining six directors were not officers of YBM. The Directors were:

a) Harry W. Antes ("Antes"), Chairman of the Board of YBM and a member of the YBM Audit Committee; appointed director on April 29, 1996; a retired Vice President of a technology company;

b) Jacob G. Bogatin ("Bogatin"), President and Chief Executive Officer of YBM; appointed director on April 4, 1994;

c) Kenneth Davies ("Davies"), appointed director on April 4, 1994; a principal of a mineral exploration company;

d) Igor Fisherman ("Fisherman"), Chief Operating Officer of YBM; appointed director on April 29, 1996;

e) Frank S. Greenwald ("Greenwald"), a member of the YBM Audit Committee; appointed director on April 29, 1996; a retired Vice President of an engineering company;

f) R. Owen Mitchell ("Mitchell"), a member of the YBM Audit Committee; appointed director on January 26, 1996; a Vice President and Director of First Marathon Securities Limited (now known as National Bank Financial Corporation),

g) David R. Peterson ("Peterson"), appointed director on April 29, 1996; a partner with a Toronto-based law firm; and

h) Michael D. Schmidt ("Schmidt"), appointed director on April 4, 1994; an independent businessman.

3. Daniel E. Gatti ("Gatti") was the Vice President of Finance and Chief Financial Officer of YBM during the material time, appointed an officer on January 26, 1996.

4. Lawrence D. Wilder ("Wilder") is a partner with the law firm Cassels Brock and Blackwell which was the Canadian general counsel to YBM during the material time. Wilder had primary responsibility for the YBM engagement which commenced on or about September 1995 and ended on August 19, 1998.

5. On or about May 6, 1997, YBM entered into an agreement with two Canadian securities dealers to act as co-lead underwriters (the "Co-Lead Underwriters") for a financing being contemplated at that time by YBM. The Co-Lead Underwriters, and the percentage of the YBM offering each was ultimately obligated to purchase, were:

a) National Bank Financial Corp., known during the material time as First Marathon Securities Limited ("FMSL") which during the material time was, and continues to be, registered under the Securities Act as a Broker and Investment Dealer (35%); and

b) Griffiths McBurney & Partners ("GMP") which during the material time was, and continues to be, registered under the Securities Act as a Broker and Investment Dealer (35%).

6. In addition to FMSL and GMP, there were three "junior" members of the underwriting syndicate for YBM's 1997 public offering, which in accordance with the terms of an Underwriting Agreement dated November 17, 1997 were obligated to purchase the remaining 30% of the YBM offering.

7. During the material time when Mitchell acted as a Director of YBM, he was also the principal representative of FMSL in the underwriting syndicate.

II. Overview of Staff's Allegations

8. There are six specific allegations being advanced by Staff of the Ontario Securities Commission ("Staff"), which may be summarized as follows:

a) that YBM filed a preliminary prospectus dated May 30, 1997, and a final prospectus dated November 17, 1997, that failed to contain full, true, and plain disclosure of all material facts relating to the securities offered; specifically, material facts respecting the mandate, information obtained by and findings of the Special (Independent) Committee created by the YBM Board of Directors on August 29, 1996;

b) that the Directors, Chief Executive Officer and Chief Financial Officer of YBM authorized, permitted or acquiesced in YBM filing a preliminary prospectus dated May 30, 1997 and a final prospectus dated November 17, 1997 that failed to contain full, true and plain disclosure of all material facts relating to the securities offered; specifically, material facts respecting the mandate, information obtained by and findings of the Special (Independent) Committee created by the YBM Board of Directors on August 29, 1996;

c) that the Co-Lead Underwriters signed a certificate to a preliminary prospectus dated May 30, 1997 and a final prospectus dated November 17, 1997 which prospectuses, to the best of their knowledge, did not contain full, true and plain disclosure of all material facts relating to the securities offered; specifically, material facts respecting the mandate, information obtained by and findings of the Special (Independent) Committee created by the YBM Board of Directors on August 29, 1996;

d) that YBM failed to comply with its continuous disclosure obligations by not issuing a news release forthwith disclosing the nature and substance of a material change in the affairs of YBM; specifically, that the auditor for YBM, Deloitte & Touche LLP (U.S.) ("D&T"), had advised YBM by no later than April 20, 1998 that it would not perform any further services for YBM, including the rendering of an audit opinion in respect of YBM's 1997 annual financial statements, until YBM had completed an in-depth forensic investigation addressing specific concerns to the satisfaction of D&T;

e) that the members of the YBM Audit Committee (Antes, Greenwald and Mitchell), the Chief Executive Officer (Bogatin), the Chief Financial Officer (Gatti) and the Chief Operating Officer (Fisherman) of YBM authorized, permitted or acquiesced in YBM failing to comply with its continuous disclosure obligations by not issuing a news release forthwith disclosing the nature and substance of a material change in the affairs of YBM; specifically, that the auditor for YBM, D&T, had advised YBM by no later than April 20, 1998 that it would not perform any further services for YBM, including the rendering of an audit opinion in respect of YBM's 1997 annual financial statements, until YBM had completed an in-depth forensic investigation addressing specific concerns to the satisfaction of D&T; and

f) that Wilder made statements to Staff of the Commission during the course of Staff's review of YBM's preliminary prospectus that, in a material respect and at the time and in the light of the circumstances under which the statements were made, were misleading or untrue or did not state a fact that was required to be stated or that was necessary to make the statements not misleading; specifically, statements contained in a letter from Wilder to Staff dated July 4, 1997 concerning the results of due diligence conducted in respect of YBM.

III. YBM's Corporate Structure During the Material Time

9. Although YBM was a Canadian company during the material time, as of May 1, 1997 it had no Canadian operations. YBM's head office was located in the United States, the location of its wholly-owned subsidiary YBM Magnex Inc ("YBM Inc."). YBM Inc. controlled 100% of the "ordinary" shares of Arigon Company Ltd. ("Arigon"), an Alderney, Channel Islands company, with offices in Budapest, Hungary. YBM Inc. also controlled 100% of the "ordinary" shares of United Trade Limited ("UTL"), a Cayman Islands company. On or about April 1, 1996, Arigon assigned its assets and business to UTL, also with offices in Budapest, Hungary. The assets and business assigned to UTL included approximately 99.9% of the shares of Magnex RT ("RT"), a Hungarian corporation also located in Budapest, Hungary. On April 1, 1996 YBM divested itself of another subsidiary, Arbat International, Inc. ("Arbat"), a Russian trading company. On or about August 22, 1997, YBM completed the acquisition of Crumax Magnetics, a magnet manufacturer located in the United States.

10. According to YBM's public disclosure as of May 1, 1997, YBM was a manufacturer and distributor of magnets. YBM also bought and sold oil. YBM's magnet manufacturing process was conducted by RT which owned manufacturing facilities in Budapest, Hungary. Pursuant to agreements entered into between RT and Arigon in September 1992, Arigon transferred to RT machinery and equipment necessary for the manufacture of magnets. Arigon also became responsible for securing all applicable clearances for production purchases and delivery of materials and supplies to RT. Arigon also became responsible for arranging for the marketing, sale and distribution of the products manufactured by RT as well as the marketing, sale and distribution of products manufactured by others. Arigon was also responsible for the purchase and sale of oil. On or about April 1, 1996, these responsibilities were assumed by UTL. Fisherman, who was the President of Arigon, and other officers and directors of Arigon, resigned their positions at Arigon and assumed the same appointments with UTL.

11. On April 29, 1996, the newly constituted Board of Directors of YBM (elected by the YBM shareholders at the annual meeting held earlier that day) held a meeting attended by all of the Directors and YBM's Canadian general counsel. During the meeting the Directors discussed the reasoning for the divestiture of Arbat and the relocation of Arigon. The minutes of the meeting record the following:

The Chairman [Bogatin] updated the board as to various other matters including the Company's plans to sell Arbat International Inc. to a group of arm's length purchasers for consideration equal to approximately (US) $250,000. The Chairman indicated that the rationale for the sales [sic] was that the Company's operations in Eastern Europe were difficult to supervise and exposed it to certain potential liability. The Chairman confirmed that Arbat will continue to render services to the Company but only on a contractual basis.

The Chairman also advised the board of a proposal to relocate the Company's wholly-owned subsidiary, Arigon Co. Ltd. from the Channel Islands U.K. to the Cayman Islands. The Chairman explained that the rationale for such move was to bring Arigon's operations closer to the Company's North American headquarters. The Chairman advised that the Royal Bank of Canada was assisting the Company and Arigon in this move. The Chairman also advised that upon completion of such move, Arigon's name will most likely be changed to United Trade Limited. The Chairman advised that this move would be accomplished by way of a tax free reorganization of assets.

IV. The Alleged Failure to Make Full, True and Plain Disclosure of All Material Facts

i) What Was Disclosed by YBM?

12. On May 30, 1997 YBM filed a short-form preliminary prospectus with the Commission.

13. The preliminary prospectus contained a Certificate which was signed by Bogatin and Gatti in their capacity as CEO and CFO respectively, and by Antes and Peterson on behalf of the Board of Directors. The Certificate stated that:

The foregoing together with documents incorporated herein by reference, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by the securities laws of the provinces of...Ontario...

14. The preliminary prospectus also contained a Certificate signed by each of the underwriters (including the Co-Lead Underwriters) stating that:

To the best of our knowledge, information and belief, the foregoing, together with the documents incorporated herein by reference, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this short form prospectus as required by the securities laws of the provinces of...Ontario...

15. YBM's Annual Information Form, dated May 1, 1997 ("AIF"), was incorporated by reference in the preliminary prospectus. The AIF stated, in part, under the heading "Business Risks, Risks Associated with Activities in Eastern Europe", that:

The Company's manufacturing operations are located in Hungary. Additionally, 47% of consolidated net sales are concentrated in Eastern Europe. Economic, political and general business conditions in these regions are highly inflationary and are potentially unstable.

The evolving market economies in Eastern Europe are characterized by a high level of cash transactions as well as less rigorous financial controls. The Company has and continues to implement recommendations made by independent public accountants and others with expertise in these regions to improve the Company's operations in these regions.

Over the last two years the Company became aware of concerns that had been expressed in the media and by government authorities generally concerning companies doing business in Eastern Europe and, particularly, in Russia. To this end, the Company has taken a number of steps to address these concerns, including:

1. The divestiture in the first quarter of 1996 of Arbat International Inc. ("Arbat"), the Company's Russian trading company which distributed a variety of consumer goods and materials through Eastern Europe and Russia. Upon a review of Arbat's operations, management was not satisfied that adequate customer and sales representative acceptance procedures could be implemented, including monitoring the propriety of sales commissions paid to sales representatives; and

2. the establishment of an independent committee of the Board of Directors who retained experts knowledgeable with political, social and economic issues in Eastern Europe to review the Company's operations to ensure that they are consistent with the standards applicable to Canadian public companies. Recommendations resulting from such review are being implemented by the Company. The Board of Directors, through the Audit Committee, will monitor ongoing compliance by the Company with such recommendations.

16. On June 3, 1997 a meeting was held between Staff responsible for the review of the preliminary prospectus, Canadian general counsel for YBM, counsel for the underwriters (Fogler, Rubinoff) and senior officers of the Co-Lead Underwriters. The purpose of the meeting was to discuss the time frame for Staff's review of the preliminary prospectus. During the course of the meeting Staff was informed that YBM had hired The Fairfax Group, a firm located in the United States, to look into rumours and innuendo surrounding the Company. Staff was informed at this meeting that Fairfax could not find any evidence to substantiate the rumours. Staff was also informed that YBM's Canadian general counsel did not look into whether the authorities in the United States had any concerns with the Company, but understood that the United States Justice Department approved the Crucible [Crumax Magnetics] transaction which gave Canadian general counsel comfort.

17. Staff issued its first comment letter in respect of the preliminary prospectus on June 16, 1997. Among the comments made by Staff in respect of the AIF was the following:

On page 6, under the heading "Risks Associated with Activities in Eastern Europe", reference is made to new standards for business practices being implemented by the Board. Please describe the circumstances respecting the review [by the Independent Committee of the Board of Directors referred to in the AIF] of the Company's operations. What recommendations are being implemented? Describe the "standards applicable to Canadian companies". [emphasis added]

18. On June 18, 1997 YBM, through their Canadian general counsel, in a letter copied to counsel for the underwriters, responded to Staff's first comment letter and, in connection with Staff's request for information in respect of the "Circumstances Surrounding the Review of the Company's Operations", stated as follows:

Over the past year, the Company has had some difficulty in being issued certain business visas for employees. As a result, the Company decided to investigate this further in order to resolve the problem. The Company's efforts confirmed that U.S. law enforcement agencies had placed a priority on uncovering infiltration of organized crime from the former Soviet Union into U.S. businesses. Given the roots of the Company and its affiliates in Russia, and the involvement of former Russian nationals as shareholders and managers of the Company, the Company believes that it may have been examined as part of any such investigation. The visas which prompted the concerns were subsequently issued by the U.S. Government without comment.

As noted in the AIF, the Company took a number of steps to address any possible concerns, including the divestiture in the first quarter of 1996 of Arbat International Inc., the Company's Russian trading company, and the establishment of a special committee of the board to review the operations of the Company in Eastern Europe.

Special Committee Recommendations

The Special Committee made the following recommendations which have been or are being implemented by the Company's management:

- Establishment of improved cash controls at the Company's Hungarian facilities;

- Establishment of more detailed customer and agent approval criteria;

- Establishment of a more accurate data base on these customers and agents;

- Establishment of new management information systems; and

- Consolidation of accounting control at the Company's Newtown, Pennsylvania, head office through establishment of integrated information systems at each site of the Company's operations.

Standards Applicable to Canadian Companies

The reference in the AIF to "standards applicable to Canadian companies" refers to internal controls and financial reporting requirements normally found in diversified Canadian public companies. [emphasis added]

19. On June 24, 1997 Staff requested that YBM undertake an independent audit of YBM's income statement for the year ended December 31, 1996 and requested that the assignment be performed by a "Big Six" accounting firm. In response to Staff's proposal, by letter dated July 4, 1997, Wilder informed Staff as follows:

As discussed above, the Confirming Accountant will be in a position to deliver its report to you no later than Tuesday, July 8, 1997. Based upon the results reported to date, we believe that the report will represent a continuation of the series of favourable due diligence results pertaining to the business of YBM conducted by independent parties. This stands in stark contrast to the rumors and innuendo to which YBM has been subject and which , based upon the information provided to us to date, have not been subject to any outside scrutiny or independent verification whatsoever.

As discussed previously, the Company, its advisors, as well as the underwriters and their advisors have made every effort to address each concern raised to date in order to complete this financing and allow the Company to complete its acquisition transaction which is crucial to its continued success. Needless to say, YBM's inability to proceed with this financing despite the efforts of all the parties concerned and referenced herein would have serious and lasting negative consequences to the Company and its shareholders. We respectfully submit that such an occurrence would not be in the public interest in view of the extensive due diligence completed to date and the uniformly positive results thereof. [emphasis added]

20. On October 13, 1997 D&T issued an unqualified audit opinion in respect of YBM's financial statements as of December 31, 1996. The audited financial statements formed part of a material change report issued by YBM dated November 13, 1997.

21. On November 17, 1997 Bogatin and Gatti, in their capacity as CEO and CFO respectively, and Antes and Peterson, on behalf of the Board of Directors, signed the Certificate to YBM's final prospectus representing that the prospectus, together with the documents incorporated by reference therein, constituted full, true and plain disclosure of all material facts. Each of the underwriters (including the Co-Lead Underwriters) signed a Certificate representing that, to the best of their knowledge, information and belief, the prospectus and the documents incorporated by reference therein, constituted full true and plain disclosure of all material facts.

22. On November 20, 1997 YBM received a receipt for the final short-form prospectus dated November 17, 1997. Pursuant to the final prospectus YBM distributed 3.2 million common shares for gross proceeds of $52.8 million. In addition, the final prospectus qualified the distribution of an additional 4 million common shares issuable upon the conversion of $48 million of secured convertible notes which YBM had previously distributed, on a prospectus-exempt basis, on or about August 21, 1997. The underwriters' fee, exclusive of any over-allotment option, was $2,376,000. In addition, subsequent to the closing of the public offering, YBM paid to FMSL and GMP $600,000 each for advisory services rendered in connection with the $48 million private placement noted above.

23. The final prospectus continued to incorporate by reference YBM's AIF. Also incorporated by reference was the November 13, 1997 material change report. In respect of the review of the Company's operations conducted by the independent committee of the YBM Board of Directors and experts retained by it, as referred to in the AIF, the only additional disclosure contained within the final prospectus, or any document incorporated by reference therein, was the following, as stated in the final prospectus:

In order to address the special risks inherent in carrying on business in Hungary in particular and Eastern Europe in general, YBM:

(a) has established improved cash controls at its Hungarian facilities;

(b) has developed more detailed end user and distributor approval criteria;

(c) is in the process of establishing a more accurate database respecting its distributors and end users;

(d) is in the process of implementing new management information systems; and

(e) is in the process of improving and centralizing controls over all of its international accounting activities at its Newtown, Pennsylvania head office.

The intent of the foregoing initiatives is to ensure that despite the fact that YBM carries on a substantial portion of its activities in Eastern Europe, its internal controls and financial reporting standards will be in accordance with those otherwise generally applicable to Canadian public companies...

ii) What Was Not Disclosed?

24. On August 15, 1996 the Board of Directors of YBM held a meeting at the YBM offices in Newtown, Pennsylvania. All of the Directors were in attendance along with Gatti, Wilder, and YBM counsel from the United States ("U.S. Counsel"). According to the minutes of the August 15, 1996 meeting, the following was discussed:

Jacob Bogatin and Daniel Gatti discussed the largely publicized interest of the United States government in companies doing business in Eastern Europe. They indicated that it is likely that the United States government has an interest in YBM because of the degree of scrutiny employees receive traveling to and from YBM's Hungarian operations and because of comments made to management in pursuing reasons for such delays. In addition, YBM Magnex has sponsored a number of employees (Hungarian and Russian nationals) in obtaining visas and has assisted many of them with US Immigration Laws. They informed the board that management in the past six months, had tried to establish closer ties to U.S. embassys [sic] abroad. They also indicated that the U.S. government, probably as a matter of policy, looks at any company with ties to Eastern Europe. Management does not believe such interest will be alleviated until the market economies in Eastern Europe are fully developed and business relationships between the East and West become routine. [emphasis added]

25. Among the "comments made to management in pursuing reasons for such delays" were comments made by U.S. Counsel for YBM to Bogatin on August 2, 1996. U.S. Counsel reported on inquiries made of the United States Attorney for the Eastern District of Pennsylvania, stating as follows:

Peter called the U.S. Attorney and requested a meeting and offered the Company's full cooperation. The U.S. Attorney returned Peter's call and said he could not meet with us [YBM]. He confirmed that the Department of Justice was conducting a "highly sensitive" criminal investigation of YBM Magnex and that it would be inappropriate to meet with us. He told Peter that nothing we could offer would be appropriate at this time. He said he could not discuss the nature of the investigation because it is "especially sensitive".

In view of the fact that, for the first time, we have a confirmation that YBM Magnex is the target of a federal criminal investigation, we must advise that this information be immediately made known to the Board of Directors. Peter and I are willing to meet with your Board and make a full report, if you believe it would be helpful. The Board may wish to consider undertaking a full internal investigation, although we have previously discussed the difficulties of investigating when we are unaware of the nature of the specific allegations against the Company.

I believe we have exhausted our efforts to obtain information about the nature of the concerns that the federal government has about YBM Magnex. We have no idea how long this cloud may continue to linger over the Company. We do know, however, that the situation is serious. [emphasis added]

26. On August 29, 1996 a Special Meeting of the YBM Board of Directors was held in Toronto. Minutes of this meeting have not been identified. Attending this meeting were: Antes, Davies, Greenwald, Mitchell, Peterson, Wilder and U.S. Counsel for YBM. The Board concluded that a Special (Independent) Committee should be formed to investigate the situation. It was further decided that no further discussions would be held or attempted with U.S. authorities until the Special Committee provided a final report. Members of the Board appointed to the Special Committee were Mitchell (Chair), Davies and Schmidt.

27. On November 1, 1996 the Board of Directors held a meeting via conference call. No minutes or notes of this meeting have been identified. However, the Special Committee prepared an Interim Report entitled "Report of the Special Committee to the Board of Directors" (the "Interim Report") on or about November 1, 1996. The Interim Report included the following comments:

In August 1996, the management of [YBM] were made aware of a pending investigation of the Company and its activities through the U.S. Attorney's office in Philadelphia. The focus of the investigation was not disclosed, however, discussions with counsel confirmed that U.S. law enforcement agencies had placed a priority on uncovering infiltration of Organized Crime from the Former Soviet Union into U.S. business. Given the roots of YBM and its affiliates in Russia and the involvement of former Russian nationals as shareholders and managers of the Company it was viewed to be a reasonable expectation that this would be the basis of such investigation.

28. The Interim Report described the mandate of the Special Committee as being to "independently investigate possible areas of concern" and to "report back to the Board on findings and recommended further actions". The Interim Report also indicated that the Special Committee "was given clear authority to undertake any independent actions or investigations which it felt were appropriate". Among the further actions proposed by the Special Committee was to engage a "professional East European investigator to provide [the Special Committee] with a background dossier on certain individuals who were original shareholders of YBM and/or who have acted as commissioned salespeople receiving material compensation from the Company".

29. On or about November 8, 1996, at the recommendation of Peterson, YBM retained the services of an independent company, The Fairfax Group, Ltd. ("Fairfax"). Fairfax, now known as Decision Strategies/Fairfax International LLC, is an international investigative and security firm that conducts corporate investigations. The Fairfax officials responsible for the YBM investigation consisted of three senior officials: a lawyer who was a former Special Prosecutor; a forensic accountant; and a retired U.S. Ambassador and former senior official with the U.S. State Department. A Retainer Agreement was entered into on or about November 14, 1996 signed on behalf of YBM by Mitchell. Fairfax's initial assignment was to "assist the client by undertaking a due diligence and internal investigation of YBN [sic] Magnex, International located in Philadelphia and Hungary".

30. In conducting its investigation, Fairfax performed extensive background checks on various persons and companies associated with YBM relying on various data bases and a network of sources located throughout the world. They also attended at offices of YBM and its subsidiaries in Philadelphia and Budapest, spoke with members of senior management, reviewed company records and met with some of the original shareholders of YBM. In the period December 1996 to March 21, 1997 Fairfax regularly briefed Mitchell on the status of its investigation, including an extensive briefing on March 3, 1997 at a meeting in Chapel Hill, North Carolina during which Mitchell informed Fairfax that he would write a report reflecting the information provided by Fairfax.

31. On March 21, 1997 Fairfax reported orally on the results of its investigation to date at a meeting in Toronto. Participating in this meeting on behalf of YBM were Mitchell and Wilder in person, and Antes and Schmidt via telephone. At the conclusion of Fairfax's presentation, Mitchell requested Fairfax to make the same presentation at a meeting in Philadelphia the following day. Participating in the March 22, 1997 meeting on behalf of YBM were Mitchell, Antes, Bogatin, Gatti, Wilder and YBM's U.S. Counsel.

32. Among the information conveyed by Fairfax during the meetings on March 21 and 22, 1997 was the following:

a) that reliable Fairfax sources in several agencies of the United States Government had indicated that the visa problems being experienced by YBM personnel were due to issues involving national security and organized crime;

b) that the original shareholders of YBM were confirmed as being members of the same Russian organized crime syndicate (the "Organization"), with interests in Europe (East and West), the Middle East and North America;

c) that among the companies which reliable sources had identified as being owned or controlled by the Organization were Arbat in Russia, Arigon in the United Kingdom and "Magnek" in Hungary;

d) that a review of YBM records had revealed that sales commissions in excess of $2.5 million had been paid by Arigon to a principal leader of the Organization and his chief assistant in the years 1993 to 1996;

e) that the equipment sold by the original shareholders to RT for approximately $14 million may have been overvalued, the equipment having been purchased for one-tenth of the value recorded on the books of RT, and that the records documenting this transaction may be false;

f) that the sale of Arbat on or about April 1, 1996 for $250,000 (of which only $150,000 was received by YBM) was to two persons who were identified as being members of the Organization and as having received sales commissions from Arigon/UTL in 1996 totaling in excess of $150,000;

g) that UTL was using a bank account, in the name of a company which was not part of YBM's publicly disclosed corporate structure, as its main operating account; that transactions involving millions of dollars went through the account; and that this account was controlled by one of the YBM original shareholders who was neither an officer nor an employee of UTL;

h) that there were indications that certain books and records had been falsified;

i) that in the opinion of Fairfax all of the "ingredients" were present for YBM to be used for money laundering activities; and

j) that in respect of companies with which YBM was doing business, some of these companies were shells, others were shells within shells, others did not exist, and still others were owned by persons who had received sales commissions from Arigon/UTL.

33. At both the March 21 and 22, 1997 meetings, Fairfax made it clear that in their view the key issue confronting YBM was that there were a number of organized crime figures involved in the operations in Hungary and that this was a serious problem. Fairfax made a number of recommendations for YBM's consideration.

34. On April 9, 1997 Mitchell sent to Fairfax for their review and comment a document, drafted by Mitchell and Wilder, entitled "Report of the Special Committee to the Board of Directors YBM Magnex International Inc. April 2, 1997". Fairfax had significant reservations respecting the contents of this document which included a section entitled "Results of the Fairfax Review". Fairfax provided their comments to Mitchell in a telephone conference call on April 10, 1997. Fairfax informed Mitchell that the report was inaccurate and that it did not reflect Fairfax's findings and the information which had been conveyed to Mitchell. Subsequently, Fairfax did not receive any further information as to what, if anything, Mitchell may have reported to the YBM Board of Directors.

35. On April 13, 1997 at the request of YBM, Fairfax attended a meeting in Philadelphia. Bogatin, Gatti and Mitchell attended this meeting on behalf of YBM. At this meeting Bogatin attempted to refute the information provided by Fairfax indicating that there was no clear proof. Fairfax stood by its findings. Mitchell indicated that Fairfax might receive a call from certain underwriters.

36. At no time prior to May 13, 1998 was Fairfax contacted by anyone to discuss the work which they undertook on behalf of YBM. In particular, Fairfax was not contacted by any Director of YBM who did not participate in the meetings noted above. Nor was Fairfax contacted by any person identifying themselves as a representative of the underwriters. At no time did Fairfax express to YBM or its advisors any reluctance to speak with underwriters or any other third parties at the direction of YBM.

37. A copy of the "Report of the Special Committee to the Board of Directors YBM Magnex International Inc. April 2, 1997" was provided to FMSL and to counsel for the underwriters. The word "Draft" is written on the upper right-hand corner of the document. According to counsel for the underwriters, the contents of this report were fully and fairly described by Mitchell at a meeting attended by a representative of GMP. Information contained within this report may be summarized as follows:

a) U.S. Counsel for YBM was advised "off the record" by the U.S. Attorney's Office that there was an "ongoing investigation" involving YBM; while unable to uncover further particulars counsel confirmed that U.S. law enforcement agencies had placed a priority on uncovering infiltration of organized crime from the former Soviet Union into U.S. business; on August 15, 1996 YBM management informed the Board of Directors of its discussions, through counsel, with the U.S. Attorney's Office;

b) on August 29, 1996 a Special Committee was formed to investigate the situation; counsel for YBM advised that due to a lack of clarity surrounding the matter, public disclosure should not be made at that time;

c) the mandate of the Special Committee was to independently investigate possible areas of concern arising out of the Company's business operations to attempt to determine the basis for any investigation and to recommend further action to address any problems or potential problems uncovered;

d) the initial review of the Special Committee focused on shareholder and employees/commissioned salespeople, and on contractual arrangements with customers; these two areas were chosen as a focus "because the greatest threat to the Company would be an investigation which questioned the legitimacy of its core business";

e) the Special Committee reviewed the original shareholders list; this review did not raise any concerns, but the Special Committee nevertheless undertook a further review;

f) there is no evidence that the existence of any investigation has impacted on trading whatsoever; "Accordingly, the Committee assumes that, to date, in accordance with the strict direction of the Board, the information has not been disclosed to parties outside the Company, its Board and advisors";

g) the initial review of the Special Committee identified very substantial commission payments paid by Arbat which seemed inconsistent with Arbat's business;

h) the Special Committee was concerned about one set of parallel records which showed substantial payments to a person on one set and the exact same payments to a corporate entity with a different name on another; later a third version was identified and had different amounts and payees; management of YBM had no explanation for this;

i) on November 1, 1996 the Special Committee reported to the Board on the initial review recommending that further investigation of the original shareholders be undertaken and that commissions paid also be reviewed; it was recommended that experts in this type of investigation be engaged as soon as possible;

j) the Special Committee retained Fairfax, a large U.S. consulting organization operated by former senior Justice Department, State Department and F.B.I. officials; Fairfax came highly recommended and exhibited a strong track record with respect to dealings in Eastern Europe;

k) Fairfax was requested by the Special Committee to: discover more details respecting the "ongoing investigation"; do background checks on management and the original shareholders; do background checks on recipients of commissions; randomly examine business transactions recorded in the records of the Company to ascertain if bona fide; and review YBM operations and make recommendations regarding improved controls;

l) the Results of the Fairfax review [as reported in the "Report of the Special Committee to the Board of Directors YBM Magnex International Inc. April 2, 1997" which was provided to FMSL] included the following:

i) initial background checks on management showed no concerns regarding Bogatin or other managers located in the United States; in Eastern Europe, however, a number of concerns arose; recipients of Arbat commissions in 1993-95 had clear ties to Russian organized crime; another recipient of commissions from Arbat was incarcerated in Switzerland; the basis of these payments appears to be unsupportable; even though Arbat was sold it was under the operating control of one of the original shareholders; Arbat was identified as an alleged vehicle for criminal acts;

ii) the original transaction respecting the acquisition of the equipment "was not as originally described"; prices paid were not as recorded on invoices; invoices were prepared well after the fact; the price paid by original shareholders for the equipment "is a fraction of the face value taken back by the original shareholders in preferred shares";

iii) "A second area of concern raised by Fairfax was the commingling of the business activities of Magnex RT, United Trade (the offshore sales arm of YBM) and those of the original shareholders resident in Budapest. The same office building was being used to transact activities for all the businesses and [one original shareholder] in particular was actively involved in activities related to United Trade and Magnex RT despite not being an officer or employee of either company. There was a bank account (since terminated) through which Company business was transacted to which [this original shareholder] was a signing officer. Management has already taken steps to relocate office activities and ensure proper separation"; this same original shareholder has a long-standing friendship with YBM's Chief Operating Officer; "foreign sources also connect the original shareholders with criminal activities including prostitution although none have been convicted or are wanted by authorities";

iv) there were a substantial number of cash transactions, in particular payment of salaries and commissions; there was a large volume of cash on hand; management has already taken steps to severely restrict the use of cash payments; and

v) the customer lists were reviewed and it was very difficult to establish end users for the products because of the use of intermediate agents for most sales;

m) the Conclusions of the Special Committee included the following:

i) there is no evidence that "senior management of YBM is in any way involved in any illegal or improper activities";

ii) that in respect of the questions surrounding the original shareholders, "it is not surprising that allegations should be made at successful businessmen of Russian origin trading between the Former Soviet Union and the West";

iii) the original shareholders, in aggregate, control over 40% of YBM common stock; "the existence of this block of shareholders is of concern to the Committee. This concern will be reduced following the completion of the equity issue to fund the Crucible acquisition..."; and

iv) the Committee directed management to eliminate any ties to the original shareholders in the "day-to-day operations of the Company";

n) the Recommendations of the Special Committee were as follows:

"a) Provide the Board with an action plan to address each of the following areas:

- Elimination of commingling of business activity with that of Company shareholders in Europe;

- Establish operational controls to ensure that management remains operationally independent from the founding shareholders;

- Establishment of improved cash controls in Hungary;

- The setting of more detailed customer and agent approval criteria;

- The establishment of an accurate data base on these customers and agents;

- Consolidation of accounting control in Newtown; and

- Engage a major accounting firm for the completion of future audits.

b) Establish a permanent subcommittee of the Board or the Audit Committee to supervise compliance with these recommendations and other issues surrounding corporate ethics in the future.

c) Advise the underwriters financing the acquisition of Crucible as to the background and results of this investigation.

d) Consider the establishment of a voluntary escrow of the Original Shareholders' shares until the completion of the acquisition and the clearance of the associated Special Warrants." [emphasis added]

38. On April 25, 1997 there was a meeting of the YBM Board of Directors held in Toronto. The meeting was attended by all of the Directors with the exception of Fisherman. Among others in attendance were Gatti and Wilder. Among the items on the agenda for this meeting was the "Report of Special Committee", which discussion was to be led by Mitchell.

39. Mitchell has indicated that a version of the report marked "BOARD DISCUSSION DRAFT", substantially similar to the version of the report provided to FMSL summarized above, was presented to the Directors at the April 25, 1997 Board meeting. Approved minutes of this meeting have not been identified.

40. One set of draft minutes of the April 25, 1997 Board meeting simply states that "Mitchell updated the Board on the findings of the Special Committee. He stated that a draft report would be tabled at the next meeting". Another set of draft minutes for the April 25, 1997 Board meeting records that "Mitchell updated the Board on the findings of the Special Committee. His report encompassed the following". These draft minutes then record, word for word, what was ultimately disclosed by YBM in their AIF (see paragraph 15 above).

41. Two sets of handwritten notes (identified below as Note 1 and Note 2) of the April 25, 1997 Board meeting, obtained from the records of YBM's Canadian general counsel, record the following in respect of the Board's discussion of the Special Committee:

Note 1:

-Special Matter - Owen

-mgmt brought it to our attention

Fairfax engaged

-confirmed active investigation

-payments made by Arbat

-to alleged crime figures

-not material amounts but

significant dollar amounts

-at first opportunity, sold bus.

-Isvestia [sic] article

-retracted

-[an original shareholder] - associated with OC but never charged or convicted

-[an original shareholder] - alleged - KGB

Concern

-large cash transactions - mgmt fixing

-co - mingling - [an original shareholder] - fixed

-adequacy of acctg - being fixed

-preferred shares - issued for $11M(U.S.)

- FMV of equip valued in $11M

- acquired equipment for much less

-Coopers hired to do valuation

- came in very high

Note 2:

Special Committee

Written report to be worked [?] with counsel

*Arbat - trade goods in Soviet Union

Payments made as commissions to Org Crime

first opportunity sold business

*Newspaper Article

Crime figures a shareholder

Only 1 - [an original shareholder]

3 individuals receiving commission questionable

original shareholder no record

sources associate them

[an original shareholder] believed to be former KGB

sits on Russian Anti-Crime Commission

Fairfax says sources tell them they are involved with bad people

*Assess [?] Hungary facility

interview 5 of original 6 shareholders

background check of buyers

Clearly there is business

customers & suppliers

They found 3 or 4 areas of concern

1) large amount of cash transactions

European Tax Plan

Issue being addressed

2) Excessive commingling activities

of company with original shareholders

Management addressing

3) Accounting records not NA stand

Improving them

systems should not be able to

be overwritten

4) Original purchase of equipment

Equipment for shares

11 mill assessed value

invoices created at a latter date

price paid actually about 1/10

US Customers

list of purchasers

Initial great concern

Agent addresses - endusers

were real. A lot of NA

sales booked through agent address

in Russia/Ukraine

Segment information correct

Fairfax satisfied.

V. The Alleged Failure to Disclose a Material Change

42. On December 3, 1997 D&T agreed to serve as auditors for YBM and to conduct the audit of YBM's annual financial statements for the year ending December 31, 1997.

43. On March 19, 1998 Bogatin sent a memo to the Vice-President of Finance for UTL, copied to the Audit Committee of the YBM Board (Antes, Mitchell & Greenwald), and to Fisherman and Gatti, stating:

As you may be aware, we have not yet received the 1997 audit report. Deloitte & Touche is reluctant to issue their report until the Board of Directors of YBM evaluates the reckless actions of United Trade related to the escrow agreements signed in December 1997. If you are unaware, United Trade entered into these agreements without anyone's knowledge or approval. Moreover, the money [US$32.2 million] was placed with an unacceptable offshore bank.

44. On March 23, 1998 D&T met with the YBM Audit Committee. At this meeting D&T brought to the Audit Committee's attention significant accounting and business issues including management's lack of internal controls over material liquid assets of the Company. D&T provided the Audit Committee with a list of certain transactions in respect of which D&T expressed concerns. The Audit Committee undertook to develop a detailed plan to investigate these transactions to the satisfaction of D&T. D&T informed the Audit Committee that in order to complete its audit, D&T would need to review and consider the results of the investigation. It was anticipated that the investigation would take several weeks.

45. In a memo dated April 7, 1998 Gatti provided to the Audit Committee a summary of the various transactions which were identified by D&T as requiring further inquiry by the Audit Committee. Gatti noted the following:

Since its inception, United Trade has controlled its own cash. United Trade management has been able to authorize and execute transactions consistent with running its day-to-day operations. My arrival in January 1996 did not result in a modification to this delegation of authority.

Since January 1996, corporate finance has made many operating changes and improvements in Hungary. However, there have been other proposed changes and improvements, including moving cash management to corporate headquarters that have not been endorsed by the CEO and COO. The transactions above validate the need to establish greater cash controls from corporate headquarters.

46. On April 9, 1998 YBM held a meeting of the Board of Directors in Philadelphia. According to minutes of the meeting all members of the Board were in attendance. Mitchell presented to the Board the concerns raised by D&T respecting certain transactions involving escrow arrangements, acquisitions and the identity of the escrow agent. Mitchell also reviewed an additional "spin-off concern" identified by D&T: that the Company engaged in related party transactions whereby suppliers of magnets, providers of goods and services, buyers of magnets and sellers of technology to YBM were, in certain circumstances, the same parties. Mitchell advised the Board that a detailed review of the transactions was required. The Board resolved that the Audit Committee be authorized to "to investigate and ascertain the facts" respecting the various transactions in respect of which D&T had expressed concerns, and directed the Audit Committee to report their findings to the Board and D&T.

47. On April 19, 1998 D&T participated in a conference call with Antes, Mitchell and YBM's U.S. Counsel. During the course of the meeting D&T indicated that since March 23, 1998 they had tried to get comfortable with some of the questioned transactions but had been unable to do so. D&T advised that a forensic investigation was required. D&T told the Company that it was in a "stop position" and that no further audit procedures or any other service would be rendered by D&T on behalf of YBM.

48. By letter dated April 20, 1998 from D&T to Mitchell, copied to Antes, D&T confirmed their discussion on April 19, 1998 indicating that the information they had received to date had made them "extremely concerned"; that there was uncertainty respecting the status of certain entities involved in the questioned transactions and that certain individuals associated with these entities and related entities were reputed to have ties to organized crime. D&T further advised that "the information obtained heightens our serious concerns that these transactions may be bogus and are being used to cover the flow of money between these companies for other purposes".

49. In the letter of April 20, 1998 D&T also reiterated its request for an in-depth forensic investigation and that such investigation should not involve management of YBM. D&T also stated the following:

We will not perform any further audit procedures or other services for YBM until the Committee completes its investigation and all matters are resolved to our satisfaction. Upon completion of the investigation, Deloitte &Touche will need to make a determination (i) whether it is willing to continue to be associated with YBM; (ii) whether it is able to issue an opinion on YBM's 1997 financial statements; and (iii) whether it will continue to be associated with YBM's 1996 financial statements.

We believe that it is highly unlikely that these issues can be resolved by your April 30 filing deadline. We are also concerned that you have released your 1997 earnings. Accordingly, we recommend that you consult with your securities counsel to address these issues.

50. On April 27, 1998 YBM issued a news release in which YBM announced its results from operations for the three month period ending March 31, 1998. YBM reported that net income had increased 94.6% compared to the year before and that sales had increased 38.2%. The news release contained no information respecting the 1997 audit.

51. On April 28, 1998 D&T informed Mitchell and Antes that it was concerned that YBM had released its first quarter earnings for 1998, having regard to the fact that the issues relating to the questioned transactions which occurred in 1997 had not been resolved and may have an impact upon first quarter earnings. D&T also recommended that:

...you consult with your securities counsel to address the Company's need to disclose to the Ontario Securities Commission and the public that the audit of the Company's 1997 financial statements has been suspended pending the completion of an investigation by the Audit Committee....

52. On May 8, 1998 D&T once again informed Mitchell and Antes that it was concerned that the Company had released its first quarter results but had failed to disclose that D&T had suspended its audit.

53. On May 8, 1998 YBM issued a news release announcing that it was in the process of filing an application with the securities regulators seeking a 45-day extension from the May 20, 1998 deadline for filing and mailing its 1997 audited financial statements to shareholders. In the news release YBM disclosed that the reason for the application was that "it is possible that it [YBM] will not receive an audit report on its 1997 financial statements from its auditors, Deloitte & Touche LLP, in time to meet the required filing and mailing deadline". YBM disclosed that "as part of concluding its audit" D&T had requested that the Board of Directors conduct an independent review of certain aspects of the Company's business and operations in Eastern Europe. As to the reason for this review YBM stated:

Management attributes the extensiveness of the audit and the requirement for this review to the fact that business practices in the Company's major market, Eastern Europe, differ from those in North America due to the relatively early stage of development of the Eastern European market economies.

54. On May 8, 1998, YBM's Canadian general counsel filed an application with the Commission on behalf of YBM seeking a 45-day extension from the May 20, 1998 deadline for filing and mailing its 1997 audited financial statements to shareholders. In this application, it is stated:

The Company completed an offering of 3.2 million common shares by way of short-form prospectus on November 26, 1997. In connection with its review of the prospectus, the Corporate Finance and Enforcement Branches of the Ontario Securities Commission (the "Commission") made certain inquiries into the Company's business, operations and public disclosure record. To the knowledge of the Company, the inquiries have not been concluded and the Company has not been advised of any finding by the Commission in connection with such inquiries. Largely as a result of the ongoing and increased scrutiny by the Commission, on April 20, 1998, subsequent to the completion of virtually all of the substantive portion of the Company's 1997 audit, the Company's auditors, Deloitte & Touche LLP ("D&T") requested that the Company perform an in-depth independent investigation (the "Investigation") to confirm the identity of certain parties to certain transactions involving the Company and generally to confirm the veracity of certain transactions underlying the Company's business.

55. On May 13, 1998 the Commission issued a temporary cease trade order in respect of the securities of YBM. This order remains in effect.

VI. The Allegation that Information Submitted to Staff was Misleading or Untrue

56. In a letter dated July 4, 1997 signed by Wilder and submitted to Staff of the Commission on behalf of YBM (see paragraph 19 above) the following statements were made:

As discussed above, the Confirming Accountant will be in a position to deliver its report to you no later than Tuesday, July 8, 1997. Based upon the results reported to date, we believe that the report will represent a continuation of the series of favourable due diligence results pertaining to the business of YBM conducted by independent parties. This stands in stark contrast to the rumors and innuendo to which YBM has been subject and which , based upon the information provided to us to date, have not been subject to any outside scrutiny or independent verification whatsoever.

As discussed previously, the Company, its advisors, as well as the underwriters and their advisors have made every effort to address each concern raised to date in order to complete this financing and allow the Company to complete its acquisition transaction which is crucial to its continued success. Needless to say, YBM's inability to proceed with this financing despite the efforts of all the parties concerned and referenced herein would have serious and lasting negative consequences to the Company and its shareholders. We respectfully submit that such an occurrence would not be in the public interest in view of the extensive due diligence completed to date and the uniformly positive results thereof. [emphasis added]

VII. Conduct Contrary to the Public Interest

57. It is the position of Staff that the conduct alleged above constitutes conduct contrary to the public interest as follows:

YBM Magnex International Inc.

a) that YBM failed to make full, true and plain disclosure in its 1997 preliminary prospectus and final prospectus of material facts respecting the Special (Independent) Committee created by the Board of Directors of YBM on August 29, 1996. In so doing, YBM acted in a manner contrary to the public interest.

b) that YBM failed to comply with its continuous disclosure obligations by not issuing a news release forthwith disclosing that YBM's auditor had notified YBM, by no later than April 20, 1998, that it had decided not to perform any further services for YBM, including the rendering of an audit opinion in respect of YBM's 1997 financial statements, until YBM had completed an in-depth forensic investigation addressing specific concerns to the satisfaction of the auditor. In so doing, YBM acted in a manner contrary to the public interest.

The Directors and Officers of YBM

c) that each of Antes, Bogatin, Davies, Fisherman, Greenwald, Mitchell, Peterson, Schmidt and Gatti, authorized, permitted or acquiesced in YBM failing to make full, true and plain disclosure in YBM's 1997 preliminary prospectus and final prospectus of material facts respecting the Special (Independent) Committee created by the Board of Directors of YBM on August 29, 1996. In so doing, each of Antes, Bogatin, Davies, Fisherman, Greenwald, Mitchell, Peterson, Schmidt and Gatti acted in a manner contrary to the public interest.

d) that each of Antes, Bogatin, Fisherman, Greenwald, Mitchell and Gatti authorized, permitted or acquiesced in YBM failing to comply with YBM's continuous disclosure obligations by not issuing a news release forthwith disclosing that YBM's auditor had notified YBM, by no later than April 20, 1998, that it had decided not to perform any further services for YBM, including the rendering of an audit opinion in respect of YBM's 1997 financial statements, until YBM had completed an in-depth forensic investigation addressing specific concerns to the satisfaction of the auditor. In so doing, each of Antes, Bogatin, Fisherman, Greenwald, Mitchell and Gatti acted in a manner contrary to the public interest.

The Co-Lead Underwriters for YBM's 1997 Public Offering

e) that each of FMSL and GMP signed a certificate to a preliminary prospectus dated May 30, 1997 and a final prospectus dated November 17, 1997 which prospectuses, to the best of their knowledge, did not contain full, true and plain disclosure of all material facts relating to the securities offered; specifically, material facts respecting the Special (Independent) Committee created by the Board of Directors of YBM on August 29, 1996. In so doing, each of FMSL and GMP acted in a manner contrary to the public interest.

Wilder

f) that Wilder made statements in a letter dated July 4, 1997 to Staff of the Commission that in a material respect, and at the time and in the light of the circumstances under which the statements were made, were misleading or untrue or did not state a fact that was required to be stated or that was necessary to make the statements not misleading; specifically, statements concerning the results of due diligence conducted in respect of YBM. In so doing, Wilder acted in a manner contrary to the public interest.

58. Staff reserve the right to make such other allegations as Staff may advise and the Commission may permit.

DATED at Toronto this 1st day of November, 1999.







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