NOTICE OF HEARING INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA IN THE MATTER OF: THE DEALER MEMBER RULES OF THE

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1 INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA IN THE MATTER OF: THE DEALER MEMBER RULES OF THE INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA AND THE BY-LAWS OF THE INVESTMENT DEALERS ASSOCIATION OF CANADA AND NORTHERN SECURITIES INC., VICTOR PHILIP ALBOINI, DOUGLAS MICHAEL CHORNOBOY AND FREDERICK EARL VANCE NOTICE OF HEARING TAKE NOTICE that pursuant to Part 10 of Dealer Member Rule 20 and Section 1.9 of Schedule C.1 to Transition Rule No.1 of the Investment Industry Regulatory Organization of Canada ( IIROC ), a set-date hearing will be held before a hearing panel of IIROC ( Hearing Panel ) on Monday August 8, 2011 at IIROC Boardroom 1, 121 King Street West, Suite 1600, Toronto, at 10 a.m., or as soon thereafter as this matter can be heard. TAKE FURTHER NOTICE that, pursuant to Rule 6.2 of IIROC s Dealer Member Rules of Practice and Procedure ( Rules of Practice and Procedure ), the hearing shall be designated on the: The Standard Track The Complex Track TAKE FURTHER NOTICE that on June 1, 2008, IIROC consolidated the regulatory and enforcement functions of the Investment Dealers Association of Canada ( IDA ) and Market Regulation Services Inc. ( RS ). Pursuant to the Administrative and Regulatory Services Agreement between the IDA and IIROC, effective June 1, 2008, the IDA has retained IIROC to provide services for the IDA to carry out its regulatory functions with respect to the conduct of IDA Members and registrants occurring before June 1, Pursuant to the Administrative and

2 - 2 - Regulatory Services Agreement between RS and IIROC, with respect to conduct of Regulated Persons occurring before June 1, 2008, RS has retained IIROC to provide services necessary for RS to carry out its regulatory functions. THE PURPOSE OF THE HEARING is to determine whether Northern Securities Inc. ( NSI ), Victor Philip Alboini ( Alboini ), Douglas Michael Chornoboy ( Chornoboy ) and Frederick Earl Vance ( Vance ) (together, the Respondents ) have committed the following contraventions that are alleged by the staff of IIROC ( Staff ) on behalf of each of IIROC, the IDA and RS: Count 1 Between August and November 2008, Alboini, as Ultimate Designated Person and a Registered Representative at NSI, engaged in a trading practice which improperly obtained access to credit for his client, Jaguar Financial Corporation, and in doing so risked the capital of both NSI and its carrying broker, thereby engaging in business conduct unbecoming or detrimental to the public interest, contrary to IIROC Dealer Member Rule Count 2 Between August and November 2008, Vance, as Chief Compliance Officer, failed to adequately supervise Alboini s trading activity involving Jaguar Financial Corporation and other NSI clients, contrary to IIROC Dealer Member Rules , , and Count 3 From 2006 to 2010, NSI, Alboini, as Ultimate Designated Person, and Vance, as Chief Compliance Officer, repeatedly failed to ensure that: NSI corrected deficiencies found in three business conduct compliance reviews and one trading conduct review; and NSI had adequate policies, procedures and practices in place; thereby engaging in conduct unbecoming or detrimental to the public interest, contrary to IDA By law 29.1, IIROC Dealer Member Rule 29.1, UMIR 7.1 and UMIR Policy 7.1.

3 - 3 - Count 4 Between November 2008 and January 2011, NSI failed to ensure reasonable efforts were made to execute orders at the best price, contrary to UMIR 5.2 and Policy 5.2, and failed to ensure that adequate policies and procedures were in place regarding its best price obligations, contrary to UMIR 7.1 and UMIR Policy 7.1. Count 5 NSI, Alboini, as Ultimate Designated Person, and Chornoboy, as Chief Financial Officer: from February 2008 to February 2009, filed or permitted to be filed inaccurate Monthly Financial Reports which failed to account for leasehold improvement costs, thereby misstating NSI s risk adjusted capital, contrary to IDA By-law 17.2 and IIROC Dealer Member Rule 17.2; and in September 2009, conducted an underwriting without having sufficient capital, thereby creating a risk adjusted capital deficiency contrary to IIROC Dealer Member Rule PARTICULARS TAKE FURTHER NOTICE that the following is a summary of the facts alleged and to be relied upon by the Staff at the hearing: Overview 1. Since at least 2006, NSI and its principals have failed to create and maintain a culture of regulatory compliance. Instances of systemic non-compliance include practices in connection with financial records, account supervision and trading practices. Repeat matters seen in both IDA business conduct reviews and an RS trade conduct and compliance review have revealed an ongoing failure to address and improve deficiencies. 2. In addition, Alboini, NSI s Ultimate Designated Person ( UDP ) and Chief Executive Officer ( CEO ), has demonstrated a disregard for regulatory compliance. Alboini has used his positions as UDP and Registered Representative ( RR ) at NSI to the benefit of Jaguar Financial Corporation ( Jaguar ), as well as its shareholders (which include Alboini himself) and lenders, resulting in risk for NSI, its other clients and its carrying broker. The Respondents 3. NSI is a Type 2 introducing broker. At all material times, being from 2006 to 2011, NSI was a registrant of the IDA, and subsequently IIROC. At all material times, NSI was also registered as an Investment Dealer and was a Participating Organization of the Toronto

4 - 4 - Stock Exchange ( TSX ) and therefore a Participant under the Universal Market Integrity Rules ( UMIR ). 4. NSI is a full service firm with its head office in Toronto, Ontario. NSI carries on retail trading, institutional trading and corporate finance work. 5. Alboini has been NSI s UDP and its CEO since June Alboini has also been a Registered Representative at NSI since at least Chornoboy has been NSI s Chief Financial Officer ( CFO ) since June 2006 and Vance has been NSI s Chief Compliance Officer ( CCO ) since October At all material times, Alboini, Chornoboy and Vance were registrants of the IDA and, subsequently, IIROC. NFC and Jaguar 8. NSI was at all material times wholly owned by Northern Financial Corporation ( NFC ). NFC is a public company and its shares are traded on the TSX. At all material times, Alboini was a shareholder of NFC and its President and CEO. 9. Jaguar is a publicly traded company whose shares are traded on the TSX. At all material times, NFC and Alboini were shareholders of Jaguar and Alboini was its President and CEO. During the material period, Jaguar opened and held multiple accounts at NSI, and Alboini was the RR for all of those accounts. 10. Chornoboy has been the CFO for NFC since June 2006 and for Jaguar since December At all material times, Jaguar, NFC and NSI shared their physical premises. Count 1: Alboini Facilitated Trading by Jaguar without Sufficient Funds 12. Between August and November 2008, Alboini, as UDP and RR at NSI, failed to transact business openly and fairly. He did so by engaging in a trading practice that enabled Jaguar to make multiple purchases of securities on margin without having sufficient funds or loan-eligible securities to put up for margin for those purchases. This trading created a hidden credit risk for NSI, its clients and its carrying broker. 13. As RR for Jaguar s accounts at NSI, and President and CEO of Jaguar, Alboini knew or ought to have known that Jaguar did not have sufficient funds to pay for the shares ordered on Jaguar s behalf between August and November As of early July 2008, Jaguar s sole account at NSI (the Main Jaguar Account ) was restricted as it had been undermargined for twenty consecutive days. The account was unrestricted in early August 2008 when it reduced its debit cash balance through sales of securities. At that time, Jaguar did not hold any securities eligible for loan value.

5 Between August and November 2008, Alboini s clients at NSI included, among others, thirteen individual or corporate clients (together, the Alboini Clients ) and Jaguar. Each of Jaguar and the Alboini Clients held one or more investment accounts through Alboini at NSI. 16. Between August and November 2008, Jaguar sought to purchase securities of various issuers. Each accumulation of an issuer s securities was given a code name and treated as a separate project (each a Jaguar Project ). The Jaguar Projects included the acquisitions of shares of Virtek Vision International Inc. ( Virtek ) and Tiomin Resources Inc. ( Tiomin ) ( Project Vulcan and Project Titan, respectively). 17. Between August and November 2008, Alboini opened ten accounts for Jaguar at NSI (the Jaguar Project Accounts ). The Jaguar Project Accounts included those bearing numbers 3P6N43E (the Project Vulcan Account ) and 3PAA11 (the Project Titan Account ). Alboini was the RR at NSI for each of the Jaguar Project Accounts. Alboini Facilitated Trading Without Funds 18. From late August to the end of November 2008, Jaguar s accounts, in aggregate, were under margined approximately 75% of the time. In particular, from September 25 to November 30, 2008, there were only three days on which Jaguar s accounts were not under margined. 19. Despite Jaguar s lack of funds or securities eligible for margin, Alboini was able to continue to purchase shares on behalf of Jaguar without any restrictions by purchasing them in one of NSI s average price accumulation accounts (the TA Account ). 20. According to NSI s own policy manual at the relevant time, that account was intended to be used to accumulate stock in inventory in cases where clients do not wish small fills for larger orders. The manual further stated that such accounts are to be used only for institutional accumulation or in the occasional circumstances for a large order from an individual. 21. Alboini purchased over $12 million of shares for Jaguar in the TA Account between August 20 and November 5, Details of the trades are set out in the Schedule attached to this Notice of Hearing. Jaguar in aggregate did not have sufficient funds to pay for the shares being accumulated in its accounts. 22. Because the shares were purchased in the TA Account, Jaguar was not required to pay for them until they were ticketed into and settled in Jaguar s accounts. In a number of instances, Alboini allowed the shares to stay in the TA Account for days or weeks after the accumulation was concluded, contrary to the proper purpose of a price accumulation account. 23. Despite not having paid for them, Jaguar treated the shares in the TA Account as its own. For instance, Jaguar issued press releases regarding its ownership of shares still in the TA Account for Virtek and Tiomin.

6 By purchasing shares in the TA Account and, in many instances, by allowing them to stay in the account after orders had been accumulated, Alboini improperly obtained and maintained access to credit for those shares. Had Jaguar ultimately not been able to pay for the shares it ordered, NSI and/or its carrying broker would have had to cover those trades, putting their capital at risk. Lack of Funds Not Apparent 25. Jaguar s lack of funds was not apparent to the Compliance Department at NSI. Alboini s activities as follows prevented NSI compliance from discovering Jaguar s lack of funds and facilitated Jaguar s ongoing trading without sufficient funds: (c) (d) (e) purchasing securities across multiple accounts; raising funds from the Alboini Clients after trade accumulations had begun; improperly permitting funds held beneficially for third parties in one Jaguar account to guarantee other Jaguar accounts; failing to fully disclose his activities to NSI s Compliance Department; and keeping inadequate records for Jaguar s accounts and share purchase orders. Purchasing Securities Across Multiple Accounts 26. As a result of the number of Jaguar Project Accounts and the fact that securities (most of which were not eligible for margin borrowing) were purchased for Jaguar across those accounts rather than in the Main Jaguar Account, the extent of Jaguar s margin debt was not apparent. Had the extent of that margin debt been apparent, Jaguar s accounts would have been restricted for being undermargined for twenty or more consecutive days. Raising Funds from the Alboini Clients 27. Jaguar did not have sufficient capital available to fund Projects Vulcan and Titan. Alboini addressed Jaguar s lack of capital by soliciting the Alboini Clients for funds. 28. To that end, Alboini provided certain documents (the Opportunity Documents ) to the Alboini Clients. Each Opportunity Document described a Jaguar Project and provided that any gains obtained as a result of that Project would be shared among Jaguar and those parties who contributed funds. In the Opportunity Documents for Project Vulcan and Project Titan, Jaguar specified that any activities for which registration is required under applicable securities laws will be undertaken by NSI on behalf of Jaguar. 29. Alboini obtained approximately $3.26 million during August and September 2008 from eleven of the Alboini Clients for Project Vulcan and approximately $2.62 million during September 2008 from six of the Alboini Clients for Project Titan. Alboini did not ensure that all funds were obtained from the Alboini Clients before shares were purchased on Jaguar s behalf in the TA Account.

7 In another instance, on August 19, 2008, without sufficient funds in the Main Jaguar Account, Jaguar was forced to fund an August 14 purchase of over 30 million shares of Blue Note Mining Inc. ( Blue Note ) for $1,259,508. To do so, Alboini, on behalf of Jaguar, sold 2,344,500 shares of Telehop Communications Inc. ( Telehop ) held by Jaguar to one of the Alboini Clients. Alboini failed to disclose to NSI, however, that it had also agreed to re-purchase those shares from the buyer at a later date, at a profit, if there was no intervening take-over bid at the repurchase price or higher. In the end, the price of those shares declined and triggered a significant potential liability for Jaguar, which it eventually resolved with the purchaser. (c) Permitting Improper Guarantees 31. In the Opportunity Documents for Projects Vulcan and Titan, Jaguar indicated that it would hold contributed funds as trustee in separate accounts at NSI and that Jaguar would undertake its activities in connection with the Projects as trustee. 32. In September 2008, Alboini allowed the Project Titan Account, the Main Jaguar Account and the Project Vulcan Account to enter into a three-way cross-guarantee despite Jaguar s undertaking to hold the funds in the Project Titan and Vulcan Accounts in trust. Alboini thereby created the appearance of availability of capital when that capital was actually held in trust for third parties. (d) Failing to Fully Disclose Jaguar Related Activities to Compliance 33. Alboini failed to fully disclose any of the foregoing activities to NSI s CCO, Vance, or its Compliance Department. 34. Among other things, Alboini failed to provide Vance or the Compliance Department with copies of the Jaguar Project Opportunity Documents or otherwise inform Vance or his staff about the Jaguar Projects, including the beneficial interests in the Project Vulcan Account and the Project Titan Account. 35. By failing to fully disclose the details relating to Jaguar s trading activities to NSI s CCO or the Compliance Department, Alboini hindered them from discovering that Jaguar was trading without sufficient funds. (e) Maintaining Inadequate Records 36. Alboini, as RR, failed to ensure that new account application forms for his client Jaguar were completed properly. As RR and UDP, Alboini also failed to ensure that order tickets prepared for Jaguar s trades were filled out clearly and completely. 37. In a number of instances, Alboini failed to ensure that orders placed on behalf of Jaguar were properly documented. Moreover, in some instances Alboini facilitated trading for a Jaguar Project Account even before the relevant new account documents had been signed or approved.

8 As a result of this inadequate record-keeping, Alboini enabled Jaguar to benefit from after-the-fact allocations of a number of its trades in various accounts, thereby hindering Vance and the Compliance Department from discovering that Jaguar had insufficient funds for its trading. Count 2: Vance Failed to Adequately Supervise Alboini and Jaguar Activity 39. Although Alboini did not fully disclose to Vance the full extent of Alboini s business dealings with Jaguar and NSI in the summer and fall of 2008, there were a number of red flags arising from Alboini s conduct. Those red flags should have led Vance to make further inquiries into Alboini s activities with Jaguar and its trading activity. 40. The red flags which should have been apparent to Vance as CCO were as follows: (c) (d) (e) Alboini opened ten new accounts for Jaguar between August and November 2008; the New Client Application Forms for these ten new accounts were incomplete, including the absence of any indication as to whether or not any third parties held any beneficial interests in the accounts; transfers of funds were effected between NSI retail client accounts and pro accounts held by Jaguar, without proper account documentation to do so; Vance was aware, as indicated to IIROC Staff, that a majority of the investors in the Jaguar Projects were also NSI clients; and over two million Telehop shares were traded out of a pro account (the 3PAAJE Account) into a retail client account on one day. 41. In failing to make inquiries when faced with the red flags mentioned above, notwithstanding Alboini s lack of full disclosure to the Compliance Department, Vance failed to properly supervise Alboini s trading activity at NSI. Count 3: Failure to Create and Maintain a Culture of Compliance 42. Between 2004 and 2008, Staff of the IDA, RS and subsequently IIROC conducted three business conduct compliance reviews (formerly known as sales compliance reviews ) and one trade conduct compliance review of NSI. Each of the deficiencies listed below was raised with NSI, including with Vance after his employment at NSI commenced in October Final reports for the above-mentioned compliance reviews were issued as follows: on March 22, 2005, the final 2004 Sales Compliance Review listing the below deficiencies was sent to NSI;

9 - 9 - (c) (d) on May 23, 2007, the final 2006 Sales Compliance Review listing the below deficiencies was sent to NSI; on April 30, 2009, the final 2007 Business Conduct Review listing the below deficiencies was sent to NSI; and on February 8, 2010, a letter was sent to NSI, making reference to a report issued in December 2008 that listed the below Trading Conduct Compliance deficiencies, of which several were repeats from previous trading conduct compliance reviews. 44. Staff gave NSI ample opportunity to address the outstanding deficiencies in the firm s daily business and supervision of its employees. Despite some efforts and repeated assurances by NSI that the deficiencies would be addressed, and notwithstanding a settlement reached with RS in May 2008 regarding trading conduct failings from 2003 to 2005, NSI, Alboini and Vance failed to address the deficiencies during the material time. 45. NSI s conduct during the material time included the following: (c) (d) (e) failing to maintain current and accurate information about and properly supervise employees external securities accounts; failing to maintain adequate grey and restricted lists and failing to ensure proper procedures were created and followed regarding use of the lists; failing to maintain adequate physical barriers in its office space to contain corporate finance information; failing to develop and maintain a firm-specific 90-day training program to complement the Canadian Securities Institute program; and failing to adequately supervise trading conduct, including audit trail, order markers, grey lists and short sale markers. 46. As UDP, Alboini was ultimately responsible for NSI s conduct during the material time, including its deficiencies in the firm s daily business and supervision of its employees. Documents Requested but Not Provided by NSI 47. In early January 2011, IIROC investigation staff requested certain documents from NSI. These documents included the following: external account disclosure forms for certain employees and evidence of review of same, for ; correspondence with NSI s carrying broker re: Jaguar and NFC accounts, for various dates in 2008 and 2009;

10 an activity report for the TA Account, including activity for the months of November and December 2008; new account documentation and account statements for any NSI clients who invested in various Jaguar projects; copies of correspondence and other documents relating to the above investors; and non-privileged correspondence for Chornoboy, Vance and Alboini, for the period from July to December In response to IIROC s January request, NSI provided some documents during January and February The bulk of the documents requested by IIROC, however, including all of the items listed in paragraph 47 above, have not been provided to date. Count 4: NSI Failed to Ensure Best Price Lack of Reasonable Efforts 49. Over the period from November 2008 to January 2011, despite being provided with ample notice of its obligation, NSI did not make reasonable efforts to comply with its best price obligation, pursuant to UMIR NSI only subscribed to three of the protected marketplaces, namely the TSX, TSXV and CNSX (Pure), during the period November 2008 to January NSI chose not to have access to three of the protected marketplaces, namely Alpha, Chi- X and Omega, from November 2008 until January NSI did not have access to obtain order information, nor did it make reasonable efforts to obtain data from these 3 marketplaces. Over 1,500 trade-through alerts were identified in NSI s trading over the period from May 2009 to January 2010, the vast majority of which occurred on Omega and Chi-X, and to a lesser extent on Alpha. UMIR 7.1 Policies and Procedures 53. NSI did not have adequate policies and procedures in place regarding its best price obligation during the period from the fall of 2008 until January As of April 2010, NSI did not have a policy for UMIR 5.2, nor did it have procedures in its manual to detail how NSI would comply with its best price obligation, testing for marketplace interruptions or router functionality.

11 Count 5: Financial Record Failings Leasehold Costs and Misstated Monthly Financial Reports 55. NSI found new premises for its Toronto office in 2007 and retained a contractor to make improvements. The contractor proceeded with its work and issued invoices to NSI from time to time in 2007 and early After deducting an interim payment made by NSI, the final cost of the contractor s work was $521, Chornoboy was responsible for reviewing the contractor s invoices and arranging for payment. Chornoboy failed to record the liabilities owing to the contractor on NSI s monthly financial reports and its annual financial statements. The invoices were properly liabilities of NSI, unless and until a different amount was agreed upon or ordered by a court, and they ought to have been recorded. 57. As a result of failing to properly record the liabilities to the contractor, NSI s Monthly Financial Reports filed with IIROC were inaccurate for the 13 months from February 2008 to February By not recording the liabilities, NSI concealed six instances in which it was in early warning for the purpose of IIROC Dealer Member Rule As UDP, Alboini was ultimately responsible for the failures to properly record NSI s liabilities and for the breach of IIROC Dealer Member Rule 30. Conducted an Underwriting Without Sufficient Capital 59. NSI was approached on September 9, 2009, with an opportunity to participate in 12.5% of a $15 million underwriting of a bought deal to finance Canada Lithium Corp. 60. Chornoboy calculated NSI s capital requirement to participate in the deal as $1,875,000. Once that amount was reduced by a disaster out clause in the underwriting agreement, the capital requirement to participate in the deal would be reduced to $937,500. NSI s risk adjusted capital on September 9, 2009, however, was only $652,000 as per its calculation at September 4, Chornoboy recommended that the additional capital be raised through a New Issue Letter, a mechanism provided for under IIROC Dealer Member Rule 100.5(v) for financing underwritings. That rule provides that an underwriting may be financed by a loan facility in the form of a New Issue Letter. Where the provider of the New Issue Letter is other than an Acceptable Institution, the funds that can be drawn pursuant to the letter must be either fully collateralized by high grade securities or held in escrow with an Acceptable Institution. 62. Chornoboy arranged for New Issue Letters to be prepared for the purpose of borrowing funds from each of Jaguar and NFC. As neither Jaguar nor NFC is an Acceptable Institution, the funds had to be either fully collateralized by high grade securities or held in escrow with an Acceptable Institution. The funds were not collateralized, and, therefore, were required to be held in escrow with an Acceptable Institution.

12 Chornoboy and NSI failed to ensure that the funds made available by Jaguar and NFC were segregated and held in escrow at an Acceptable Institution. As such, there was no assurance that they would be available to cover the underwriting in the event that they were needed. In fact, on September 10, 2009, an amount representing NFC s portion of the New Issue Letter funds was moved into NFC s bank account rather than NSI s bank account and was applied to NFC s line of credit pursuant to a standing arrangement between NFC and the bank. That portion of the funds was therefore not available. 64. Without the New Issue Letter funds held in escrow, so as to be available on demand in connection with the underwriting, the cost of the underwriting was attributable to NSI. As a result, NSI was in a position of risk adjusted capital deficiency in the amount of $285,500 from September 9 to September 14, Even if the New Issue Letter financing had been properly effected, NSI would have been in a position of a risk adjusted capital deficiency in the amount of $801,000 due to the additional capital required by the underwriting concentration rules. 66. As UDP, Alboini was ultimately responsible for NSI s failure to ensure that the firm had sufficient risk adjusted capital at all times. GENERAL PROCEDURAL MATTERS TAKE FURTHER NOTICE that the hearing and related proceedings shall be subject to IIROC s Rules of Practice and Procedure. TAKE FURTHER NOTICE that, pursuant to Rule 13.1 of the Rules of Practice and Procedure, the Respondents are entitled to attend and be heard, be represented by counsel or an agent, call, examine and cross-examine witnesses, and make submissions to the Hearing Panel at the hearing. RESPONSE TO NOTICE OF HEARING TAKE FURTHER NOTICE that the Respondents must serve upon Staff a Response to the Notice of Hearing in accordance with Rule 7 of the Rules of Practice and Procedure within twenty (20) days (for a Standard Track disciplinary proceeding) or within thirty (30) days (for a Complex Track disciplinary proceeding) from the effective date of service of the Notice of Hearing. FAILURE TO RESPOND OR ATTEND HEARING TAKE FURTHER NOTICE that if the Respondents fail to serve a Response or attend the hearing, the Hearing Panel may, pursuant to Rules 7.2 and 13.5 of the Rules of Practice and Procedure:

13 proceed with the hearing as set out in the Notice of Hearing, without further notice to the Respondents; accept as proven the facts and contraventions alleged by the Staff in the Notice of Hearing; and (c) order penalties and costs against the Respondents pursuant to IDA By-laws 20.33, and and/or IIROC Dealer Member Rules 20.33, and PENALTIES & COSTS TAKE FURTHER NOTICE that if the Hearing Panel concludes that the Respondents or any of them did commit any or all of the contraventions alleged by the Staff in the Notice of Hearing, the Hearing Panel may, pursuant to IDA By-laws and and/or IIROC Dealer Member Rules and 20.34, impose any one or more of the following penalties: Where the Respondent is/was an Approved Person: (c) (d) (e) (f) (g) (h) (i) a reprimand; a fine not exceeding the greater of: (i) $1,000,000 per contravention; and (ii) an amount equal to three times the profit made or loss avoided by such Approved Person by reason of the contravention. suspension of approval for any period of time and upon any conditions or terms; terms and conditions of continued approval; prohibition of approval in any capacity for any period of time; termination of the rights and privileges of approval; revocation of approval; a permanent bar from approval of the IIROC; or any other fit remedy or penalty. Where the Respondent is/was a Member firm: a reprimand; a fine not exceeding the greater of: (i) $5,000,000 per contravention; and (ii) an amount equal to three times the profit made or loss avoided by the Member by reason of the contravention;

14 (c) (d) (e) (f) (g) suspension of the rights and privileges of the Member (and such suspension may include a direction to the Member to cease dealing with the public) for any period of time and upon any conditions or terms; terms and conditions of continued Membership; termination of the rights and privileges of Membership; expulsion of the Member from membership in the IIROC; or any other fit remedy or penalty. TAKE FURTHER NOTICE that if the Hearing Panel concludes that the Respondents or any of them did commit any or all of the contraventions alleged by the Staff in the Notice of Hearing, the Hearing Panel may pursuant to IDA By-law and/or IIROC Dealer Member Rule assess and order any investigation and prosecution costs determined to be appropriate and reasonable in the circumstances. DATED at Toronto, this 29 th day of July, JEFFREY KEHOE VICE-PRESIDENT, ENFORCEMENT INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA Suite 1600, 121 King Street West Toronto, Ontario M5H 3T9

15 Schedule Purchases on behalf of Jaguar Executed through the TA Account (Aug. Nov. 2008) Trade No. Name of Security 1 Virtek Vision International Inc. 2 Virtek Vision International Inc. 3 Tiomin Resources Inc. 4 Tiomin Resources Inc. 5 Tiomin Resources Inc. 6 Tiomin Resources Inc. 7 Energem Resources Inc. 8 Energem Resources Inc. 9 Dynamite Resources Ltd. 10 Benton Resources Corp. 11 Tundra Semiconductor Corporation 12 Naikun Wind Energy Group 13 Mundoro Capital Inc. 14 Zaruma Resources Inc. Number of Shares Purchased Total Acquisition Cost (approx.) Accumulation Dates Date Ticketed to Jaguar Settlement Date 3,405,500 $3,011,000 Aug Aug. 29 Sept. 4 1,628,700 $1,674,000 Sept. 4, 10 Sept. 22 Sept ,681,000 $1,604,000 Sept Sept. 23 Sept. 26 9,774,000 $659,000 Sept Sept. 30 Oct. 3 12,312,000 $679,000 Oct Oct. 29 Nov ,000 $20,000 Oct Oct. 31 Nov. 5 5,210,500 $700,000 Sept Sept. 30 Oct. 3 2,138,500 $338,000 Oct Oct. 31 Nov. 5 6,137,500 $671,000 Sept Sept. 30 Oct. 3 2,770,700 $508,000 Oct Oct. 31 Nov ,000 $1,941,000 October 1-3 Oct. 31 Nov ,350 $297,000 Oct Oct. 31 Nov. 5 14,000 $3,000 Oct. 23 Oct. 31 Nov ,000 $27,000 Oct Oct. 31 Nov. 5