A British Columbia Securities Commission (BCSC) hearing panel has dismissed insider trading allegations against an investment analyst.
The BCSC panel issued its decision the case of Hon Seng Lum (also known as Victor Lum) on Thursday. Lum was accused of trading in shares of Baja Mining Corp. with knowledge of undisclosed material information about the company.
The panel found that BCSC staff did not prove their case, and it dismissed all of the allegations against him, including that he had traded on inside information himself, and that he tipped his sister, May Lee Chan Lum.
At the time in question, Lum worked as an analyst for institutional investment firm Mount Kellett Capital (Hong Kong) Ltd. evaluating investments in the natural resource sector. The BCSC alleged that Lum learned of cost overruns at Baja’s Boleo copper mine project before the news was publicly announced, and that he and his sister both traded on that inside information.
According to the panel’s decision, Lum was represented by counsel at the BCSC hearing but did not call any witnesses. Lum argued that he never had possession of any undisclosed material information.
The panel agreed with him, ruling that the case was not proven. It found that much of the information about problems at the project was publicly disclosed, and that allegations of insider trading were not supportable. “The executive director has not established on the balance of probabilities that Victor Lum had knowledge of material information that had not generally been disclosed prior to the sale of Baja shares,” says in its decision.
As a result, the panel dismissed all of the allegations in the case, including allegations of conduct contrary to the public interest allegations against both Lum and his sister.