RE: Ottawa Citizen''''s Business FrontOSC slaps further fine on Hinke
Thermal Energy founder violated previous order, made false statements
Kristin Goff, The Ottawa Citizen
Published: Thursday, July 12, 2007
The Ontario Securities Commission has levied a $15,000 fine and imposed tough trading sanctions against Thomas Hinke, the founder and former president of Thermal Energy International, after finding he violated terms of its orders and agreements.
The OSC found that Mr. Hinke breached a 2006 order prohibiting him from trading Thermal Energy shares for six months. Additionally, the commission ruled that he "made false statements" to the OSC staff and commission.
Mr. Hinke's past conduct has shown "disregard for the Commission and its orders on two separate occasions," the OSC said in its written decision. "Prior reprimands and cease-trade orders have had no effect on Hinke's conduct."
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Font: ****The OSC hearings on the alleged violations were held in February, but the agency's decision was not released until this week. In addition to the fine, which was to cover about 25 per cent of OSC staff costs in pursuing the case, Mr. Hinke was banned for 10 years from trading in Thermal Energy shares.
Mr. Hinke was also prohibited for a period of 10 years from serving as an officer or director of a publicly traded company or from trading directly or indirectly in any securities except for transactions related to his Registered Retirement Savings Plan or Registered Retirement Income Fund.
Mr. Hinke, who is no longer involved in the operation of Thermal Energy, could not be reached for comment yesterday. He has the right to appeal the decision to Ontario Divisional Court within 30 days, according to the OSC.
Mr. Hinke was president and chief executive officer of Thermal Energy from December 1996 to December 2000, and continued to own more than 10 per cent of the company's shares through early 2006, which made him a company insider for purposes of OSC share trading reporting requirements.
In May 2006, Mr. Hinke was ordered to pay $37,000 in penalties for failure to report $188,518 in insider stock trading. He was also banned from trading Thermal stock for six months from the order's effective date of Feb. 15, 2006.
He subsequently sold 17,478 shares of Thermal through a formerly dormant Bank of Montreal trading account on July 7, 2006 for $2,568, according to OSC documents. Those shares were not listed on Mr. Hinke's 2006 statement of assets and liabilities, according to the OSC report. Staff also alleged that Mr. Hinke failed to report the trading ban to BMO, as was required.
Mr. Hinke, who represented himself at OSC hearings, offered several explanations for the July trade, including that he had no memory of the trade, that he was suffering from anxiety and that the amount of the trade was so small, he felt it was "not significant enough to report or disclose," according to OSC documents.
The OSC decision also said that Mr. Hinke had violated terms of an earlier settlement agreement reached in April 2002 that required him, as a company insider, to report all trades of his Thermal shares "in a timely fashion."
© The Ottawa Citizen 2007