A hearing panel of the Investment Dealers Association of Canada has found a Global Securities Corp. approved person guilty of failing to properly perform his role as a gatekeeper to the capital markets when dealing with U.S. based clients trading in a Pink Sheet listed company.

Following a disciplinary hearing held between July 11-14 and July 25-26, 2006, the found that Stephen Toban failed to properly perform his role as gatekeeper to the capital markets. Between approximately March 1999 and February 2001, Toban facilitated the opening of investment accounts for as many as 35 non-Canadian residents, some of whom had criminal or regulatory disciplinary histories, without making diligent inquiries to ensure that each client’s reason for opening an account was legitimate, and without making diligent inquiries to ascertain that each client intended to use the account for legitimate investment purposes.

In addition, between approximately September 2000 and February 2001, Toban facilitated certain transactional activity in the accounts of the 35 non-Canadian residents noted above without making diligent inquiries to ensure the legitimacy of the transactions in circumstances which should have called tge activity into question because it was peculiar, suspicious or appeared to be consistent with market manipulation, deception or other improper market related activity.

In certain accounts, the primary activity, or in some cases the sole activity, was receiving the transfer of shares of Nutraceutical Clinical Laboratories International Inc. (NCCL), a Pink Sheet listed company, from another non-resident account. The shares were subsequently sold in the market. In some cases, after the shares were received, a lesser number of shares were crossed back to the originating account as market activity. The hearing panel was satisfied that Toban either didn’t know, or was not prepared to admit to the reason for the transfers. The hearing panel found that by facilitating the transactional activity in the accounts, without reasonable assurances that there were legitimate reasons for the transactions, Toban failed to adequately perform his role as a gatekeeper for the securities industry.

The hearing panel also found that on or about Oct. 16, 2000, Toban effected transactions in a client’s account based on instructions he accepted from an individual who was not authorized to trade in the account.

In the course of its decision, the panel admitted into evidence the transcript of an interview conducted by the United States Securities and Exchange Commission of Rodney Gilbert, NCCL’s CFO and a client of Toban’s. Gilbert discussed the activity in his account in which Toban made transactions based on instructions from a stock promoter involved with NCCL, who was not authorized to trade in the account. Toban objected to the admissibility of the SEC transcript; however the panel admitted it into evidence, while acknowledging that it should be cautious in the weight given to the transcript.

The penalties to be assessed to Toban will be determined at a penalty hearing to be held on Dec. 20, 2006.