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Canadian Securities Regulatory Monitor News and Insight

Tag Archives: insider trading

Insider Trading Decision Provides Guidance to Assess Tippee’s Knowledge About Tipper’s Source of Information

Posted in Enforcement, Jurisprudence, OSC

In the Finkelstein v. Ontario Securities Commission[1] insider trading case, the Ontario Court of Appeal provided guidance on the interpretation of a “person in a special relationship with an issuer” as it applies to successive tippees who possess material, non-public information (MNPI) about an issuer.

OSC’s 2015 Findings

For a detailed summary of the 2015 decision of the Ontario Securities Commission (OSC), please see here. In brief, the OSC Panel found that, in connection with three separate M&A transactions between 2004 to 2007, a lawyer tipped his friend (Azeff), an investment advisor, … Continue Reading

CSA 2015 Enforcement Report Reveals Increased Regulatory Activity and Significantly Higher Monetary Sanctions

Posted in CSA, Enforcement, IIROC, MFDA, OSC

On February 23, 2016, the Canadian Securities Administrators (CSA) released its annual report on the enforcement activities of its members. Enforcement and pre-enforcement activity has increased significantly in 2015. Monetary sanctions imposed by regulators more than doubled year-over-year and regulators concluded 38% more cases in 2015 even as the number of new proceedings increased slightly.

The 2015 Results

Monetary sanctions doubled: The regulators collectively imposed the highest amount of monetary sanctions on market participants since 2009, the year their investigation into the crash of the asset-backed commercial paper market was settled. In 2015, regulators imposed $138.3 … Continue Reading

BCSC dismisses insider trading and tipping allegations despite not condoning a respondent’s conduct

Posted in Uncategorized

In the recent Re Lum[1] decision, the British Columbia Securities Commission (BCSC) dismissed insider trader and tipping allegations against an investment analyst and his sister because the trading occurred on the basis of information that already had been generally disclosed. In the circumstances, the tipping that occurred, though not endorsed by the BCSC, was not found to warrant the imposition of a public interest penalty. The Panel’s approach to the public interest point is consistent with other decisions in BC and Ontario where a public interest penalty is denied after an underlying insider trading case has failed.

Summary of Continue Reading

Another tipping and insider trading case based exclusively on circumstantial evidence

Posted in Enforcement

In the recent Weicker[1] decision which followed a contested hearing, the British Columbia Securities Commission (BCSC) accepted Staff’s insider tipping and trading allegations against a geologist and his wife based on circumstantial evidence that included the “unnaturally timely” trading by the geologist’s wife.

Summary of Facts

BCSC Staff alleged that Robert Weicker, a geologist in a special relationship with Geo Minerals Ltd., informed his wife, Amina Weicker, about Geo’s impending takeover by New Gold Inc. before it was generally disclosed and that Ms. Weicker traded on this material non-public information.

At the relevant time, Geo was a junior mining … Continue Reading

OSC again uses public interest power to impose penalty where insider trading law technically does not apply – Follow up

Posted in Enforcement, Industry News, OSC

Canadian Lawyer Magazine interviewed us last week on our recent post “OSC again uses public interest power to impose penalty where insider trading law technically does not apply”.

The Canadian Lawyer Magazine article is available online here: “OSC plays public interest card where insider trading didn’t apply”.… Continue Reading

OSC again uses public interest power to impose penalty where insider trading law technically does not apply

Posted in Enforcement, OSC

Yesterday, the OSC approved a settlement agreement between OSC Staff and Anand Hariharan in a case involving allegations of tipping, insider trading and conduct contrary to the public interest. Hariharan agreed to a reprimand and significant restrictions on trading for 10 years. The settlement also envisages a disgorgement of profits but, surprisingly, only a portion of them.

Hariharan learned from a friend that a subsidiary of Loral Space & Communications Inc. (“Loral”) was going to be acquired by another company (“MDA”). Hariharan’s friend was an MDA employee and the acquisition was a material fact to both Loral and to MDA. … Continue Reading

OSC accepts circumstantial evidence of tipping and insider trading in important new decision

Posted in Enforcement, Industry News, OSC

In the recent Azeff[1] decision which followed a contested hearing, the Ontario Securities Commission (OSC) accepted several insider tipping and trading allegations based on “firmly established” circumstantial evidence against an M&A lawyer and four registrants. Cases based on circumstantial evidence have been successfully contested by respondents in other cases in Canada.[2]

Summary of Facts

OSC Staff alleged that, in connection with six separate M&A transactions between 2004 to 2007, a lawyer (Finkelstein) tipped his friend (Azeff), an investment adviser, and that four investment advisers (Azeff and his partner Bobrow, Miller and his associate Cheng) engaged in insider trading … Continue Reading

What Happens When OSC Staff Can’t Prove Its Allegations? Lessons from the Baffinland Insider Trading Saga

Posted in Industry News

Securities regulators pursuing allegations of insider trading typically allege not only that respondents have violated the statute but also that their conduct is contrary to the public interest. When a regulator fails to demonstrate a violation of the statute, what are the limits on using the public interest to punish conduct otherwise found to have been lawful? The decision of the Ontario Securities Commission (OSC) in Waheed[1]may signal the OSC’s appetite to exercise more restraint than was seen in other recent cases in determining when the public interest standard has been satisfied.

The Waheed decision also brings home … Continue Reading

The Challenge With Determining When The Writing Is On The Wall: insider trading case considers materiality of confidentiality agreement and expired unsolicited offer

Posted in Enforcement

The British Columbia Securities Commission (BCSC) recently considered whether a consultant for a law firm had committed insider trading and breached the public interest when she traded a client’s shares with knowledge of undisclosed facts.

In Weiqing Jane Jin, 2014 BCSECCOM 194, there was no question that the consultant was in a special relationship with the issuer client and had traded while in possession of facts that had not been disclosed.  The materiality of these facts was contested.

Confidentiality Agreement Was Not a Material Fact

The BCSC determined that it was not a material fact that the client … Continue Reading

Can the OSC’s Public Interest Power Be Used to Expand Insider Trading Liability?

Posted in Enforcement, OSC

In recent years, the Ontario Securities Commission (OSC) has been relying on its discretionary public interest power to make enforcement orders in circumstances where no actual breach of securities laws has been proven and no egregious violation of recognized conduct standards is necessarily involved. This trend is becoming evident in enforcement proceedings involving insider trading allegations. In this post, we discuss some recent OSC decisions (Donald[1], Moore[2] and Suman[3]).

The Shifting Scope of the Public Interest Power

The public interest power authorizes the OSC to make discretionary orders imposing a broad range … Continue Reading