West Hawk President reprimanded for insider training
By Peter Ewart
Friday, June 08, 2007 03:52 AM
Michael Derek Townsend, former West Hawk Development Corporation president and chair of its board of directors, has confessed to insider trading of hundreds of thousands of West Hawk and Lateegra Gold Corporation stocks. As punishment, Townsend has agreed to pay a $40,000 fine, as well as restrict his trading activities for one year. In addition, he has been forced to resign from positions in a number of companies. The BC Securities Commission has described Townsend’s behaviour as acting “contrary to the public interest” (www.bcsc.bc.ca).
West Hawk Development Corporation came to the attention of people in the Central Interior of BC several years ago when it tried to push through a coal gasification plant and mine at Australian Creek, a ranching area about eighteen miles south of Quesnel, BC. Local farmers and ranchers opposed the mining operation on the basis that it would have ruined prime farm land and posed serious environmental problems for the adjacent properties and for the nearby Fraser River.
For a number of Australian Creek residents, it was a matter of trust. These long time residents were especially upset about the methods used by the mining company to get control of their property. For example, Bob and Lenore Yorston, who own one of the affected ranches, were told by West Hawk officials that the company had the coal rights to all their land. This claim was later proven to be false.
In addition, the Yorston’s were given contradictory statements regarding the environmental effects of the mine. In one letter they received, the company reassured them that coal dust would be minimal and kept “from escaping from the site.” But in another document, the company stated that the mining operations would have “significant visual, noise and dust impacts.”
The RCMP Integrated Market Enforcement Team first became aware of Townsend’s secret insider trading, and then alerted the BC Securities Commission. Townsend, who sometimes gives investment advice on a popular Vancouver radio station, has admitted to purchasing 228,000 shares of West Hawk and selling another 300,000 shares (along with shares in Lateegra Gold Corporation), using offshore accounts in the Caribbean.
Sun reporter David Baines writes that Townsend’s insider trading “is one of the most treacherous and heinous offences that a senior officer or director of a publicly traded company can commit.” According to a senior RCMP officer, “there are only three reasons for a Canadian resident to set up an offshore account, and all of them are illegal: money-laundering, tax evasion and market manipulation” (Vancouver Sun, June 6).
West Hawk Development Corporation describes itself as a mineral exploration and development company “committed to building shareholder value.” It currently has mining properties in Northern BC, Nunavut, and Colorado. Although the company has been in existence since the early 1990’s, it “does not yet have any [active] operations” (www.researchchfrc.com). Since Townsend resigned in November 2006, a new president has been appointed and several board members who resigned recently have been replaced.
According to Lenore Yorston, who came under considerable fire several years ago from various quarters for her spirited opposition to West Hawk’s proposed operation, the company appears to have backed off from its efforts to establish a coal gasification and mining operation at Australian Creek – at least for the time being.
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Posted by: zoom on June 8 2007 8:40 AM
;-)