OSC lays charges in insider tipping and trading scheme

In its statement of allegations, the OSC claims that nine people, and a company based in the British Virgin Islands, Pollen Services Ltd., engaged in an illegal insider tipping and trading scheme between April 2007 and February 2008. “The illegal tipping and insider trading scheme involved trading in the securities of six reporting issuers and yielded trading profits of approximately $962,000,” it says.

The OSC claims that Eda Marie Agueci, who was an executive assistant to the chairman and to the mining group of the investment banking department of GMP Securities “was a central figure in the trading scheme”. It says that she “sought out and acquired, through her employment or from others, material non-public facts concerning pending corporate transactions,” which she would then share with the other respondents. “In doing so, she repeatedly engaged in unlawful tipping,” it says.

The commission alleges that the recipients of the inside information would then trade on it, and pass it along to others; and the OSC says that they also made payments to Agueci in relation to their illicit trading. The regulator also says that the various participants in the scheme tried to conceal their unlawful trading activity in various ways.

In addition to Agueci, the OSC alleges that the participants in the scheme included Dennis Wing, president and chief executive officer of investment dealer, Fort House Inc.; a dealer rep that once worked at Fort House; a vice-president and director of corporate finance/investment banking with Desjardins Securities; a former director, officer and dealing representative at an exempt market dealer; two people who worked for a food services distribution company, and a school teacher.

Also named in the allegations is Ian Telfer, chairman of Goldcorp. Inc. The OSC says that he did not participate in the scheme, but that he “facilitated other conduct” by two of the accused “including disguising the beneficial ownership of securities and circumventing the monitoring… of communications and trading [by GMP],” which it says was contrary to the public interest.

The regulator is seeking trading and registration bans, disgorgement, administrative penalties, and costs in the case.

Telfer denies allegations

Ian Telfer categorically denied the allegations made by the OSC in its statement of allegations.

“I believe the allegations by the OSC that I have acted contrary to the public interest to be completely without merit”, Telfer said in a statement released Tuesday evening. “The allegation is that I ‘acted contrary to the public interest’ by agreeing to include a family member of a business associate in a private financing. There is no allegation that I breached any securities law or that I was involved in any insider trading scheme; as the OSC stated, I did not participate in the alleged scheme.”