The U.S. Securities and Exchange Commission is alleging that three Canadians engaged in insider trading, based on tips from the spouse of a Merrill Lynch Canada Inc. employee.

The SEC filed a complaint in the U.S. District Court for the Southern District of New York alleging that three Canadian citizens, Phillip Macdonald, Martin Gollan and Michael Goodman, engaged in insider tipping and trading in the securities of several companies ahead of public announcements of business combinations.

The complaint alleges that Goodman’s wife learned of the business combinations as an administrative assistant with Merrill Lynch Canada, and that he misappropriated the information by tipping the other two men who traded on the information.

The SEC is seeking injunctive relief, disgorgement of ill-gotten gains plus prejudgment interest and civil penalties.

The allegations have not been proven. However, Goodman agreed to settle the charges against him, without admitting or denying the allegations.

He consented to a proposed final judgment permanently enjoining him from further violations of securities rules and finding him liable for disgorgement of ill-gotten gains, but waiving payment of those penalties and declining to impose a civil penalty, based on his sworn Statement of Financial Condition.