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CASE MANAGER Alex Iskander, P.Eng.
MEMBER Rajendra K. Agrawal, P.Eng.
This is the decision of the Discipline Committee case manager
with respect to the Investigative Committee's recommended
order dated February 17, 2004 concerning the conduct of Rajendra
K. Agrawal, P.Eng.
BACKGROUND
During the course of an investigation by APEGGA's Investigative
Committee, Mr. Agrawal admitted to conduct that constitutes
unprofessional conduct in relation to trading of Western
Facilities Fund shares. In accordance with Section 52(1)
of the Engineering, Geological and Geophysical Professions
Act (the "Act"), the Investigative Committee may
recommend any order that it considers appropriate. Its recommended
orders (denoted "Stipulated Order") are attached
to this decision.
A recommended order must be provided to a member of the
Discipline Committee who has been designated to act as a
case manager. If the case manager agrees with the order,
he or she must discuss the order with the investigated person,
and if the investigated person agrees with the order, the
order has the same force and effect as an order made by the
Discipline Committee following a formal hearing. If the case
manager or the investigated person rejects the order, the
matter must be referred to the Discipline Committee for a
formal hearing.
As the case manager designated by the Discipline Committee
to review the matter, I agree with the recommended orders.
During my discussion of the orders with Mr. Agrawal, he
confirmed that he freely and voluntarily agrees with the
orders and with the facts and findings contained in the Investigative
Committee's stipulated order.
ORDERS
Therefore, in accordance with Section 52(3) of the Act,
it is ordered that:
1. Rajendra K. Agrawal be reprimanded for unprofessional
conduct.
2. Rajendra K. Agrawal successfully complete the professional
practice exam within six (6) months of the date of this decision.
3. Rajendra K. Agrawal's registration with APEGGA be suspended
if he fails to complete the professional practice exam within
six (6) months of the date of this decision.
DATED this 13th day of April, 2004 at Calgary, Alberta.
_____________________________
Alex Iskander, P.Eng.
Case Manager, Discipline Committee
STIPULATED ORDER
TAKE NOTICE that the Investigative Committee of The Association
of Professional Engineers, Geologists and Geophysicists of
Alberta has concluded an investigation into your conduct
in relation to an allegation of illegal insider trades of
Western Facilities Fund.
AS A RESULT of its investigation and based on the evidence
and information that has come to the attention of the Investigative
Committee, the Investigative Committee proposes the following
findings:
I AGREED STATEMENT OF FACTS
1. At all material times Rajendra K. Agrawal was a Professional
Engineer registered in good standing with APEGGA and was
engaged in practice, including reserve evaluations.
2. In December, 2000, Rajendra K. Agrawal, P.Eng., had discussions
in which he was advised that Western Facilities Fund (WFF)
was seeking an asset purchase, merger, or other corporate
transaction. On January 2, 2001, WFF issued a press release
advising the public that it was considering a number of possible
mergers.
3. On January 11, 2001, Rajendra K. Agrawal, P.Eng., was
contacted by an officer of WFF who advised that Danoil was
a potential candidate for merger. Rajendra K. Agrawal, P.Eng.,
was requested to assess and report to WFF on Danoil’s
reserves, including the review of a report of another consultant.
4. By reason of the foregoing, Rajendra K. Agrawal, P.Eng.,
was engaged in a professional activity on behalf of WFF,
a reporting issuer in Alberta, and thus was in a special
relationship with WFF as defined in Section 9(b) of the Securities
Act of Alberta.
5. On January 18, 2001, Rajendra K. Agrawal, P.Eng. attended
the offices of Danoil and met with corporate officers of
Danoil and received disclosure of Danoil’s operations,
including information concerning exploration projects and
reserves.
6. Between January 24, 2001 and January 30, 2001, Rajendra
K. Agrawal, P.Eng., purchased 90,000 shares of WFF through
the trading account of his son over which he had direction
and control.
7. On January 31, 2001, a press release was issued announcing
the merger of WFF and Danoil.
8. On February 21, 2001, a second press release was issued
which announced that WFF and its subsidiary Nevis Ltd. had
entered into a firm arrangement with Danoil.
9. Between January 31, 2001 and February 21, 2001, the price
of WFF shares increased from approximately $0.50 per share
to approximately $0.90 per share.
10. Between January 31, 2001 and February 27, 2001, Rajendra
K. Agrawal, P.Eng., sold the 90,000 shares of WFF purchased
in his son’s account and realized a profit of approximately
$28,675.00.
11. As a result of the foregoing, Rajendra K. Agrawal, P.Eng.,
admitted to the Alberta Securities Commission a breach of
Section 147(2) of the Securities Act and acknowledged that
his actions were contrary to the public interest.
II FINDINGS
1. That the conduct of Rajendra K. Agrawal, P.Eng., constitutes
unprofessional conduct and a violation of APEGGA Code of
Ethics as follows:
a. That Rajendra K. Agrawal, P.Eng.’s, participation
in the aforesaid insider trading indicates that he has engaged
in activities that may create a conflict of interest with
his clients without the knowledge or consent of the clients,
thereby constituting a contravention of APEGGA Code of Ethics
Rule of Conduct #5;
b. That the conduct of Rajendra K. Agrawal, P.Eng., aforesaid,
in that he had knowledge of a potential merger between WFF
and Danoil, constitutes improper use of confidential information
and thereby contravenes APEGGA Code of Ethics Rule of Conduct
#6.
III ORDERS
1. That Rajendra K. Agrawal, P.Eng., be reprimanded for
unprofessional conduct.
2. That Rajendra K. Agrawal, P.Eng., successfully complete
the professional practice exam within six (6) months of the
issuance of this Order, failing which his registration with
APEGGA be suspended until such time as the professional practice
exam is successfully completed.
NOTE: This decision is published in accordance with an APEGGA
Council policy that requires publication in The PEGG of all
discipline decisions. |
