Source: The Canadian Press

The Alberta Securities Commission said Tuesday it has settled insider trading allegations with the vice-president of junior oil and gas company Groundstar Resources Ltd. (TSXV:GSA) for $25,000 plus $8,000 in costs.

The regulator said the settlement with Kenneth Chobotuk, Groundstar’s vice-president of exploration, was in relation to trades made around the implementation of an oil and gas production sharing contract involving Groundstar Resources and Vast Exploration (TSXV:VST) and the Kurdistan Regional Government of Iraq.

In the settlement agreement, Chobotuk admitted he had knowledge of undisclosed material information about the contract when he bought 45,000 shares of Vast between May 13 and 20, 2008.

Vast’s share price ran up significantly on May 21, 2008, the day after the contract was announced. The commission said Chobotuk made a gain of $14,000 through the transactions.

The commission noted that Chobotuk did not intend to breach securities laws, “however, he neglected to exercise due diligence to ensure his understanding was correct.”

“Chobotuk now understands that a person engaged in business with the issuer is a person in a special relationship with the issuer,” it stated in the agreement.

“Chobotuk did not sell his shares in Vast following the issuance of the news release.”

Chobotuk has also agreed to cease trading in or buying securities, with some exceptions, for two years and will not act as a director or officer of any issuer for one year.