A Market Regulation Services Inc. hearing panel has dismissed all charges against a trader accused of frontrunning.

A RS hearing was held in Vancouver on August 29 and 30, in a case against Jason Fediuk, an institutional equity trader with Salman Partners Inc. RS alleged that Fediuk committed a frontrunning violation when he traded TVX Gold Inc. shares ahead of a client order to purchase 3.5 million shares of TVX on April 26, 2002.

However, the panel found that it did not have clear and convincing proof that Fediuk knew of the client order when he entered a non-client order prior to the entry of the client’s order. Therefore it dismissed all charges, and did not even deal with the question of whether the client order could have been expected to move the market.

RS says it will not appeal the decision. “Frontrunning is ranked by the securities industry as one of the top risks to market integrity,” said Gerry Halischuk, RS’s vice president, Market Regulation, Western Region.

“RS will always vigorously prosecute anyone we suspect of frontrunning. While this was not the decision we were hoping for, I am satisfied that the panel demonstrated a clear understanding of the allegations and weighed the evidence fairly.”