An Ontario man has agreed to give up about half his trading profits to settle allegations that he traded on inside information about a pending corporate acquisition.
The Ontario Securities Commission (OSC) announced a settlement Tuesday with Anand Hariharan, a Mississauga, Ont.-based aircraft maintenance engineer, who bought options on the stock of Loral Space & Communications Inc. based on a tip from a close childhood friend, Satish Talawdekar, concerning the pending acquisition of Loral’s major subsidiary by MacDonald, Dettwiler & Associates Inc., where Talawdekar worked.
According to the settlement, trading on the tip netted Hariharan a profit of US$68,683. The settlement notes that, while the trading “did not technically contravene” securities laws, because Loral was not a reporting issuer in Ontario, “his conduct impugned the integrity and fairness of the capital markets because of the misuse of material, confidential information.” As a result, the settlement concludes that Hariharan’s conduct was contrary to the public interest.
To settle the allegations, Hariharan agrees to make a voluntary payment of $35,000 to the commission, and to pay $5,000 in costs. He also agrees to a 10-year ban from trading, except for certain trading in his retirement accounts; and a 10-year registration ban.