The Ontario Securities Commission (OSC) has approved a settlement agreement on Wednesday with Andrei Miguel Postrado, a former accountant with KPMG LLP who admitted to engaging in tipping and insider trading based on confidential information about pending merger deals.
In May, the OSC settled with Postrado’s father, who admitted to trading on the inside information that his son provided. The OSC has also now settled with the son, who agreed to a seven-year trading and registration ban, along with a $20,000 administrative penalty, more than $200,000 in disgorgement, and $8,500 in costs.
In settling the allegations, Postrado admitted that he purchased the securities of three issuers ahead of the public announcement of their acquisitions, generating $200,375 in trading profits. He also admitted to tipping his father, who traded on the information as well.
Postrado’s father agreed to be banned for five years and was ordered to pay an administrative penalty of $10,000, along with $4,250 in costs and $109,200 in disgorgement.
Investor hit with trading ban, fine
Postrado was not assigned to any of the deal teams involved with the acquisitions, the settlement states. Instead, he overhead conversations in the office in two instances that led him to believe that a firm was about to be acquired; and, in the other case, he accessed information on the firm’s systems that provided information about another pending acquisition.
The settlement notes that Postrado has no disciplinary record, he co-operated fully with OSC staff and accepted full responsibility for his conduct: “He has extremely limited resources, no assets in his name and is currently unemployed.”
KPMG has said that it also co-operated with the OSC’s investigation in this case and that it terminated Postrado after the allegations came to light.
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