Cease and Desist Order Against Kingscroft Investments Limited ("Kingscroft Investments") and Donald Alexander Carmichael ("Carmichael")

REGARDING the Loan and Trust Corporations Act R.S.O. 1990, c. L. 25 (the "Act")

AND REGARDING the Matter of Kingscroft Investments Limited ("Kingscroft Investments") and Donald Alexander Carmichael ("Carmichael")

CEASE AND DESIST ORDER

Section 192 of the Act, as amended, provides that where, in the opinion of the Superintendent of Financial Services (the "Superintendent"), a registered corporation or other person is committing any act or pursuing any course of conduct that does not comply with the Act or the regulations, or might reasonably be expected, if continued, to result in a state of affairs that would not be in compliance with the Act or the regulations, or constitutes a practice which might prejudice or adversely affect the interests of depositors, the Superintendent may give notice to the registered corporation or other person of an intention to order the corporation or other person to cease doing any act or to cease pursuing any course of conduct identified by the Superintendent, or to perform such acts as in the opinion of the Superintendent are necessary to remedy the situation.

The Superintendent issued a Notice of Proposed Cease and Desist Order under section 192(1) of the Act dated June10, 2005.  Kingscroft Investments and Carmichael requested a hearing before the Superintendent in relation to that Notice.

On May19, 2005 Kingscroft Investments and Carmichael were charged under sections 213(1) and 214(1)(a) of the Act, which make it an offence to transact, conduct, undertake or solicit the business of a loan or trust company in Ontario while not registered under the Act.

The Superintendent, Kingscroft Investments and Carmichael entered into Interim Minutes of Settlement and Undertaking [sic] to avoid potential duplication between proceedings in relation to the Notice and proceedings in relation to the charge under sections 213(1) and 214(1)(a) of the Act.  The Interim Minutes of Settlement and Undertaking were dated December15, 2005.

Kingscroft Investments and Carmichael were convicted of the charge under sections 213(1) and 214(1)(a) of the Act on November 20, 2006, based on a plea of guilty.

Kingscroft Investments and Carmichael withdrew their request for a hearing before the Superintendent in relation to the Notice of Proposed Cease and Desist Order, and acknowledged that a Permanent Cease and Desist Order would be issued.

The Superintendent hereby orders that Kingscroft Investments and Carmichael and the officers, directors, employees, agents or representatives of Kingscroft Investments:

A. Immediately cease and desist soliciting and/or accepting deposits from the public.

B. Immediately cease and desist transacting and/or soliciting business in Ontario as a loan corporation and /or as a trust corporation.

C. Immediately cease and desist in engaging in any form of advertisement, solicitation or negotiation for the receipt of deposits from the public.

TAKE NOTICE THAT section 214(1)(c) of the Act provides that anyone who fails to comply with any order made under the Act is guilty of an offence. Section 214(2) provides that the person convicted of an offence under section 214(1)(c) is liable on a first conviction to a fine of not more than $100,000 and on each subsequent conviction to a fine of not more than $200,000.

AND TAKE NOTICE THAT section 214(3) of the Act provides that anyone who caused, authorized, permitted or participated in a failure to comply with any order made under the Act is guilty of an offence, and on conviction is liable on a first conviction to a fine of not more than $100,000 and on each subsequent conviction to a fine of not more than $200,000.

DATED at Toronto, Ontario, this 11th day of December, 2006.  

__________________
Robert Christie
Superintendent of Financial Services

TO:

Terry Corsianos
Barrister & Solicitor
1595 Sixteenth Avenue Suite 301
Richmond Hill ON L4B 3N9
Solicitor for Kingscroft Investments Limited
and Donald Alexander Carmichael
Robert Conway
Legal Services Branch
Financial Services Commission of Ontario
5160 Yonge Street 17th Floor
Toronto ON M2N 6L9
Solicitor for Superintendent of
Financial Services