THIS IS MY COPY OF THE COMPLAINT I MADE TO THE RCMP:
mona.eichmann@rcmp-grc.gc.ca
Corporal: 905-876-9647
CONFIDENTIAL
THIS DOCUMENT IS TO BE KEPT CONFIDENTAL FROM
THE ONTARIO SECURITIES COMMISSION
AND
TD WATERHOUSE
and any outside agencies
2
Dear Ms. Eichmann;
It was a pleasure speaking with you on the telephone regarding my issue with TD
Waterhouse and the OSC.
I have spoken with two Toronto lawyers regarding this matter. Both have reviewed the
case with a great deal of interest, however, due to my current financial situation and the
facts in this case, both lawyers urged me to speak with the RCMP.
I have compiled an explanation outlining facts and statements that I felt are extremely
relevant and clearly demonstrate the situation.
For simplicity and clarity I divided the case into 3 components:
1- TD Waterhouse role. (enclosed)
Regarding TD Waterhouse it is absolutely imperative that the investigators have
a full understanding of the “Ontario Securities Act” and specifically the
difference between a trade, SWAP and private placement. If they do not
understand the Act, they will not understand the nature of the violations and the
impact on the outcome of the hearing.
2- Robert Brown’s role as star witness (to follow)
Robert Brown created false documents, impersonated Richard Ochnik and
provided the documents to be used as evidence against Ochnik. He also admitted to
making false statements under oath and instructing witnesses to make false
statements under oath during the OSC investigation.
3- Ontario Securities Commission. Role (to follow)
I intend to provide evidence that the OSC cut a deal with TD Waterhouse. I will
present what I believe is evidence that the OSC obstructed justice and is a party
to fraud after the fact.
I am not the best writer and would be more comfortable meeting and speaking with an
officer.
I understand that my allegations are very serious and I understand that providing false
information is an offence.
Kindest Regards
Richard Ochnik
416- 628- 0984
richard1900@yahoo.com
3
LEGEND
Statement of Facts – TD Waterhouse:
(Fraud, Perjury and Obstruction of Justice)
Summary……………………………………………………………………..………… 4
Individual Involved……………………………………………………………..……….5
Understanding of Terms and Events …………………………………………………….6
Definitions and Terms.…………………………………………………………………..6
EXAMPLE 1 (SWAP)…………………………………………………………………. 6
EXAMPLE 2 (TRADE)………………………………………………………..………..7
Summary of Events:……………………………………………………………..………9
OSC Investigation on TD Waterhouse……………………………………..…………..11
OSC Investigation the Company and Richard Ochnik…………………………………12
The Fraud…………………………………………………………………….…………13
Findings of the Commission……………………………………………………………15
Evidence……………………………….………….……………………………………16
How the true evidence would have affected the Hearing’s conclusions……………….16
Other Facts and Misleading Statements………………………………………………..16
Request…………………………………………………………………….…….…….17
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STATEMENT OF FACTS – TD WATERHOUSE
Summary:
1. I would appreciate the assistance of the IMET unit regarding a fraud that
occurred in March 2006. During hearings held by the OSC a key witness
knowingly provided false information under oath causing a change in the
outcome of the case to the detriment of the defendants and shareholders. TD
Waterhouse did not released all the requested documents in its possession and
had obstructed justice. As a result damages were incurred by the defendants in
excess of $20 million.
2. The individual involved is a securities broker for TD Waterhouse, acting as a
witness for the OSC. The individual was well educated in the facts and knew
the implications that her statements would have on the direction and outcome
of the hearings.
3. The prime function of the hearing is to make judgments. The panel was to
determine if the accused distributed securities without prospectus, traded
securities without being registered and were their actions contrary to public
interest; and to do this, the panel makes a determination of the facts. The
Ontario Securities Commission (OSC) panel received evidence both in sworn,
written affidavits and in sworn, oral testimony in the open hearing.
4. The swearing of an oath is so relevant and so respectful of truth in
administrative and judicial proceedings that the Parliament of Canada
prescribes a criminal sanction against falsehood in sworn testimony.
5. The Criminal Code of Canada, Part IV, determines that such malfeasance is an
offence against justice. Part IV is entitled, “Offences against the administration
of law and justice”, and its Sections 131 to 139 speak to the issues of
falsehood, untruth and prevarication under oath in judicial proceedings.
6. A “witness” means a person who gives evidence orally under oath or by
affidavit in a judicial proceeding, whether or not he is competent to be a
witness, and includes a child of tender years who gives evidence but does not
give it under oath, because, in the opinion of the person presiding, the child
does not understand the nature of an oath.
R.S., 1985, c. C-46, s. 118; R.S., 1985, c. 27 (1st Supp.), ss. 15, 203.Section
131(1) states:
7. …ever one commits perjury who, with intent to mislead, makes before a person
who is authorized by law to permit it to be made before him a false statement
under oath or solemn affirmation, by affidavit, solemn declaration or
deposition or orally, knowing that the statement is false.
8. The Criminal Code makes no exception, and there is no Statute of Limitation
as it relates to fraud.
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Individual Involved:
9. The individual involvde had full knowledge of the terms and issues at hand.
She understood the implications of her actions and how they could affect the
outcome of the hearing. Her actions were calculated and deliberate to deceive
and therefore, constitute fraud.
Mrs. Hatice E. Pakdil;
D.O.B. April 7, 1975
Address: Rougr Hill, Toronto
Home Phone : 416-429-6200
Cell Phone: 416-712-6379
Husband: Efstathios Notidis
Education: University of Toronto, Graduated June 1998
Course of study: Economics and International Relations
Securities Education: Toronto Dominion Banks brokerage training program,
completion Sep. 1998. She also completed her CSC,
CPH, PFP, and courses in derivatives, fundamental,
options, life and Accident Insurance.
Registrant: Ontario Securities Commission Registrant since January 1999.
Work: Investment Advisor (sales person) for the TD Waterhouse
Investment Advice, a full-service brokerage arm of TD Bank.
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Understanding of Terms and Events:
10. In Ontario the Ontario Securities Commission strictly regulates the sale and
distribution of shares.
11. It is absolutely important to note the clear distinction between the terms
“SWAP”, Private Placement” and “trade” in order to understand the significant
impact the terminology has on the outcome of the case.
12. The main issue has to do with the timing of events and determining what
happened when and who would have been responsible and the application of
the Ontario Securities Act.
Definitions and Terms: (meanings as they apply to this issue)
13. SWAP: is when a shareholder currently owns the shares in one account and
trades them with shares or money of equivalent value with his other account.
There is no beneficial change in ownership. You must own the shares prior to a
swap taking place.
14. EXAMPLE 1:
(Hatice testified that a SWAP took place)
15. If I asked my broker to do a SWAP (that would indicate that the shares already
were purchased and the trade and distribution had already taken place – the
brokerage has no liability) it would be a request to move the shares from one
of my accounts into another one of my accounts. In this case I have two (or
more) accounts with my broker. Crutial to a SWAP: there is no flows of funds
or shares needed to record and my account transaction would look like this:
Before the SWAP (SWAP):
Regular trading account:
RRSP account:
Shares in 146 Company
Valued $100
Cash $100
Step 1.
Client ask the broker to perform a SWAP
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16. After the SWAP:
Regular Trading Account:
RRSP Account:
Cash $100 Shares in 146 Company.
Valued $100
There are no sales or distribution of securities. The beneficial owner is the same.
Transaction Completed.
17. Private Placement: is when shares or bonds of a company are traded by one
individual to another. There is a change in the beneficial owner of the security.
You must not own the shares prior to the trade taking place or it is called
a”swap”. A trade is the facilitation of a transfer of securities from an issuer to
another individual for valuable consideration.
18. An individual transaction is either a” trade” or a” SWAP” it can not be both.
19. Crossing of Securities: it is prohibited for a broker to act for a seller and
purchaser of the same security in the same trade. (Compliance Manual 1998
section 4.23 tab. 112)
20. EXAMPLE 2 (TRADE):
(This is what evidence shows took place in this case – contrary to Hatice Pakdel’s
sworn testimony)
21. In a private placement trade there is a sale and purchase of a security that
initiates a distribution or change of ownership. In this example four boxes will
be used to show the flow accurately. In this case TD acted for both the buyer
and seller and only one broker box is needed.
22. Step 1.
In the beginning:
COMPANY TD WATERHOUSE INVESTOR
ACCOUNT
INVESTOR RRSP
ACCOUNT
Shares in 146
Company.
Valued $100
Cash $100
23. Trade process:
24. Client wishes to acquire shares of company for his RRSP.
25. The shares are the property of the company until they are paid in full.
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26. The company needs to have a licensed broker to act for the transaction.
Company establishes a 7% commission based on the share sale amount. This
case revolves around establishing when the securities were sold and by whom.
That is why Hatice claimed it was a SWAP during her testimony, limiting her
involvement and liability.
27. Step 2.
28. On behalf of the investor, TD contacts and instructs company that they have a
purchaser for $100 in shares and to produce a share certificate for an RRSP
account. TD instructs the company what to place on the shares for registration.
– “TD Waterhouse in trust for (client name) RSP Account # xxxxx.”
29. The company produces the shares and gives them in trust to the licensed
broker. The shares are the property of the company.
COMPANY TD WATERHOUSE
Holds shares in
escrow
INVESTOR
ACCOUNT
INVESTOR RRSP
ACCOUNT
Shares in 146
Company.
Valued $100
Cash $100
30. Step 3
31. TD places the shares into the RRSP account of the investor and pays itself by
removing the cash from the investor account.
COMPANY TD WATERHOUSE INVESTOR
ACCOUNT
INVESTOR RRSP
ACCOUNT
Cash $100 Shares in 146
Company.
Valued $100
32. Step 4
33. A few weeks later, TD pays the company for the shares using a TD cheque.
34. Only at this point the shares become the property of the investor and the share
sale and distribution occur.
COMPANY TD WATERHOUSE INVESTOR
ACCOUNT
INVESTOR RRSP
ACCOUNT
Cash $100 Shares in 146
Company.
Valued $100
35. Step 5
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36. The company pays TD a 7% commission for the trade using a company
cheque. In some cases the commission was paid before the shares were sold.
COMPANY TD WATERHOUSE INVESTOR
ACCOUNT
INVESTOR RRSP
ACCOUNT
Cash $93 Cash $7 Shares in 146
Company.
Valued $100
37. Transaction completed.
38. Special Note: At no time did the company deal with the investors directly.
a. In fact the OSC and other witnesses said that they did not have any contact
with Richard or the company prior to the purchase of shares.
b. Other witnesses said that they did not know the company name until they
were told by TD.
c. Mr. Muise claimed that his documents were altered after he signed them.
Page 15-23
d. TD had direct contact with the company securities lawyer. Hatice had a
copy of the “Private Placement Agreement” where it clearly stated that the
client does not own any shares and has no rights to them unless signed by
the company or paid for in full.
Summary of Events:
39. The issue at hand first began in 2002.
40. In 2002 a company that I was affiliated with made arrangements with TD
Evergreen (later known as TD Waterhouse) to raise capital through the sale of
shares to a number of investors. In the year 2002 to 2003, 43 investors invested
into the company a total of approximately $1.5 million.
41. In order for the company to be in compliance with the Ontario Securities Act,
they needed to have a licensed broker handle all the transactions.
42. Hatice was a licensed broker with the Ontario Securities Commission.
43. Hatice Pakdil, a broker for TD Evergreen (TD) negotiated a deal with Paul
Panciv, the company’s financial advisor who was registered with the OSC to
assist the company in a “private placement”.
44. The company agreed to pay TD a sales commission of 5% cash and 2% shares
on the total value of shares purchased per client.
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45. Hatice was the only broker responsible for the sale of shares; and she had full
knowledge of all the company’s activities as it relates to securities.
46. The company relied on TD to keep the company within regulation of the
Ontario Securities Act.
47. All transactions were approved by TD compliance and legal departments.
48. Upon approval, TD instructed the company to issue shares in the name of the
individual clients with the assigned TD account numbers.
49. The shares would read; “TD Waterhouse in Trust for (Client Name) RRSP
Account No. (number).
50. The company then issued the shares and gave them to TD.
51. TD sold the shares to the clients account
52. TD issued a check payable in full for the shares.
53. The company then issued a cheque equivalent to 7% of the shares purchased
per client.
54. The arrangement was working well and the company raised approximately
$1.5 million before TD stopped performing its obligations due to a change in
company policy.
OSC Investigation on TD Waterhouse:
55. Richard Ochnik and the Company were not a party to the hearing and not able
to defend the allegations. The OSC deliberately split the parties into two
separate actions to gain advantage over the other parties.
56. In 2002, unknowing to the company, the OSC began an investigation regarding
the activities at TD. As a result TD was found to be in violation of the Ontario
Securities Act for not disclosing the 7% commission paid by the company; and
for failing to meeting the suitability requirements of the investors (TD clients).
57. In order to avoid a compliance violation, “crossing of securities”. TD denied
working for the purchaser and selling for the company. Although all available
evidence clearly indicated that TD was involved in a trade, they described the
transaction as a swap and claimed that the commissions were only an
administration swap fee. TD argued that they only facilitated a transaction on
behalf of their clients and not on behalf of the company. They argued that the
client had purchased the shares prior to coming to TD.
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58. TD negotiated a deal with the OSC and stated a number of false issues to
protect themselves from OSC sanctions and collaborated with the OSC’s
objectives.
59. As part of the deal, TD was given an “Order” to provide full restitution to all
the shareholders and to pay all the costs associated with the investigation. TD
had to agree that the facts contained in the ‘settlement agreement’ were true,
which included that they did not work for the company and had no knowledge
of Robert Brown’s loans.
60. At this point all the shareholders were full repaid by TD as part of the
restitution order.
61. The fraudulent information along with false evidence was made available to
witnesses through a number of media channels prior to my hearing. Both the
TD and OSC knew that the stated facts were false and misleading.
62. TD Waterhouse cut a deal with the OSC and in exchange for their testimony
TD Waterhouse could keep over $100 000 paid in commissions by the
company. Also, the company would be forced to fully restore TD Waterhouse
for all its costs and damages. The OSC would prosecute the defendants and act
as proxy for TD Waterhouse and use its extraordinary powers and authority to
prejudice the defendant’s opportunity for a fair hearing.
63. In fact the OSC Chair, Mr. Moore, had publicly stated that Richard Ochnik and
the company had committed the offences months prior to acting as Chair
during my hearing.
64. The TD/OSC transcript were entered as evidence during our hearing and; under
the guidance of the OSC investigators and Robert Brown, witnesses altered
their previous statements to conform with the TD Waterhouse settlement
agreement.
65. The OSC and TD Waterhouse used their hearing as a training ground in
preparation for our hearing.
OSC Investigation the Company and Richard Ochnik:
66. Based on the information provided by TD, the OSC began an investigation into
the transactions of the company. The OSC filed a Notice of Violation and
began hearings into the operations of the company. The OSC represented TD
during the hearings and were seeking an “Order” to provide full restitution to
affected parties (TD). The Chairman overseeing the hearing for the OSC was
Mr. Moore.
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(The OSC was very aggressive in its investigation and began publicly
announcing that the company was in violation of the Ontario Securities Act
prior to the hearings. In fact, Chairman Mr. Moore announced to the news
media, as fact, that the company had violated the Securities Act months prior
to the hearing. The OSC then began to orchestrate the events to ambush the
company’s attempts of formulate a defense. It was brought to my attention but
I could not verify the fact that the lawyer for TD once worked for the OSC. I
believe the OSC actions were illegal or at least unethical. (I will explain this
in more detail further on.)
67. At the hearing Hatice and the key witness, Robert Brown were untruthful.
Hatice denied any knowledge of the loans even though witnesses stated
otherwise. She named Richard Ochnik as Director even though she handled all
the paperwork and knew that Ian Ochnik was the director. She received a copy
of the “Articles of Incorporation” stating that Ian was the sole director. Her
recollection of the events was fabricated.
I did not list all Hatice’s untruths to the commission and her company
because they have little relevance except as to her character. The OSC
refused to question her assistant, Paul Bayfield, even though I asked them
to – stating that he had direct knowledge of the events. Later I found that
Paul Bayfield was also mentioned by witnesses in sworn statements as
having full knowledge of the loans. I asked the OSC for contact
information to contact him for my defense but they refused to provide his
contact information even though they had access to the information. I also
asked TD for Paul Bayfield’s contact information and they also refused.
As a result, none of the records, e-mails letters were ever made available
during the hearing. In fact, because the OSC was acting for TD they had
full access to all the documents.. TD was not named as a ‘plaintiff’ and as
such I was not allowed access to the records of an “unrelated” party (I
will explain this in more detail further on.)
68. Void of a written contract between the company and TD Waterhouse the
transaction explanation could be spun to create sympathy for TD as being an
unwilling victim. TD then blamed everything on Richard Ochnik and the
company. The broker for TD testified under oath that it was only a swap.
69. Void of a contract TD could effectively argue that it has no obligations to the
company. In accordance to the definition of a SWAP, TD could also argue that
it did not sell or distribute the securities.
70. In fact, they were able to convince the Chair, that despite all the evidence at
hand, there was no evidence to prove that they were performing Private
Placements and trading in securities on behalf of the corporation, however we
13
have documentation to contradict their testimony which they also had in their
possession however, chose not to produce at the hearing.
The Fraud:
71. The fraud occurred during the OSC hearing when Hatica Pakdal testified to the
relationship between TD and the company.
72. During her testimony under oath she claimed that she never worked for the
company and that her job was in the processing of payments for individual
investors that had previously purchased shares directly from the company. As
part of her testimony she deliberately began misleading the Chair by
reorganizing events, stating untruths, and altered her statements of facts to
harmonize with the original settlement agreement with the OSC.
73. to implicit myself and the company
74. During questioning under oath, Hatice was not truthful on a number of issues.
Not all issues are easily provable. Not all the untruths have had as much effect
to the outcome of the hearing as the issue dealing with her role in the share
sale, distribution and private placement.
75. Hatice testified under oath that the transactions were a swap, which is not true.
Although she had processed the transaction as a SWAP within TD Waterhouse,
she led the company to believe that she was acting as Broker and performing
the function as a private placement and trading shares on the company’s behalf
as a licensed securities broker.
76. Never once during her numerous e-mails to the company did she ever indicates
that it was a SWAP. In fact the word SWAP never came out until after the
OSC investigation was well under way in about 2004.
77. I know for a fact that Hatice knew about the loans at an early stage of the
process because her assistant told me that investors spoke to her and even sent
her letters regarding the loans. Irregardless of Mr. Brown’s loans, it does not
change the fact that it was a trade and not a swap, which is extremely
significant to the outcome.
78. Hatice mislead TD Waterhouse as to the true facts relating to her involvement
with the trading of the securities.
A) She told compliance that she meet with Ian Ochnik, which was not true.
B) She told the company that there was no contract with the company which
was not true.
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C) She told the securities commission that the shares were already purchased
before the accounts came to her, and that was not true.
D) Hatice told them that she knew nothing about the loans or she would not
have processed the transactions, and that was not true.
79. To protect herself she gave instructions to her assistant and denied any
knowledge of the facts. In fact, she avoided speaking with the majority of her
own clients.
80. The company relied on her representations and took instructions from her and
Paul Bayfield, her assistant, as to how the deal needed to be structured.
Findings of the Commission:
81. The OSC Chair, relied on her sworn testimony and that the transaction was a
SWAP and not a trade despite evidence to the contrary. Because it was treated
as a swap, the transaction was concluded to have been concluded before it
came to TD. As a result of her false testimony, other pertinent facts were
discarded by Mr. Moore who was also the Chair at my hearing.
82. (Regarding 93, there are a number of witnesses that testify that TD did know
about Brown’s loans.)
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83. As a result of Hatice’s fraudulent statements, the company and I were found in
violation of Section 25 and Section 53.
84. Section 25: traded securities without being registered with the commission to
trade securities and without an exemption from the requirement for
registration contrary to section 25 of the Act.
85. Section 53 distributed securities of 1464210 without the filing of a preliminary
prospectus and prospectus, and the obtaining of a receipt contrary to section 53
of the Act.
Evidence:
86. During the hearing I was not represented by council because I received the
documentation less than 10 days prior to the hearing date. The OSC refused to
grant an adjournment even though fraudulent documents that did not originate
from me were presented at the hearing.
87. At the hearing I presented numerous pieces of evidence that clearly
demonstrated the truth , however, I was not able to find the contract between
TD and the company that could definitively establish the true relationship of
the parties until recently.
88. I demanded that TD provide a copy of the contract. However, they denied
existence of any contract. I ask the OSC for the contact information for the
assistant, Paul Bayfield, so that we could call him as a witness, but they refused
to provide the information. In fact, the OSC told potential witnesses not to
contact or discuss this matter with the company.
89. When the company and my life fell apart the company accountant moved to
Pickle Lake and asked me to store a few boxes of his personal files in the
garage. Time went by and he then told me that the files were no longer
required and that I should keep anything important for him and throw the rest
out.
90. I found a file labeled with the company name, and in that file there was an email
from Hatice confirming that she was performing a “private placement”
for the company.
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How the true evidence would have affected the Hearing’s conclusions:
91. The function of a “private placement” means that TD sells shares and
distributes the shares as a licensed broker in accordance to regulation.
92. During the OSC hearing the testifying lead investigator indicated that the
Issuer is responsible for being in compliance. If it was a trade TD Waterhouse
would have been a party to the violation. If it was a SWAP TD would not be a
party to the violation.
93. The company could have claimed reliance on the professionals at TD, and TD
would not be entitled to restitution.
94. The commission would not have named me as the ‘de facto’ director there was
no trade before TD was involved. Also, they would not have concluded that it
was a SWAP because the sale and distribution had not been concluded before
TD’s involvement. In fact, TD traded in the securities.
95. By naming me the ‘de facto’ Director I automatically became liable and
responsible for the misconduct of TD.
96. The company and I would not have been found guilty of securities violations
because we met the requirements by having a licensed broker with the Ontario
Securities Commission deal with the transactions.
97. The company would not have been given a restitution order to pay TD
compensation of over $1.5 million if it would have been determined that TD
initiated the trades.
Other Facts and Misleading Statements:
a) Hatice was asked to provide a copy of all her e-mails, however, she omitted the
crucial email documenting that TD will represent the company in the private
placements.
b) Hatice told investigators that she deleted most of her old e-mails.
c) Hatice told individuals that Richard was the director when all the documentation
was signed by Ian Ochnik, as President, and all negotiations were conducted by
Paul Panciw.
d) She testified that she did not know about the loans, however her assistant, Paul
Bayfield and other witnesses spoke to her about them and she continued to trade.
e) Hatice kept copies of her emails from TD Waterhouse.
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Request:
I understand the allegations I am making are very serious. I understand that the
allegations will have a profound effect on individuals and companies. I do have
additional documents that could assist in this investigation and I could make them
available to you in the determining the truth.
I would appreciate the opportunity to meet with you and discuss the issue at hand.
Please assist us in providing an independent non partial investigation? I am
prepared to file criminal charges.
I really look forward to your assistance in this matter.
Kindest Regards,
Richard Ochnik
416- 628- 0984
richard1900@yahoo.com
Ontario Securities Commission 