Sunday, September 21st21.4°C
23284
22754

OSC clears key players in Baffinland takeover battle of tipping, insider trading

TORONTO - The Ontario Securities Commission has dismissed allegations of insider trading and tipping against Jowdat Waheed and Bruce Walter, key figures in a company that waged a 2011 bidding war for Baffinland Iron Mines Corp.

Nunavut Iron Ore Acquisition, which Walter and Waheed headed, later joined forces with their rival — multinational steel giant ArcelorMittal — to buy Baffinland in partnership for about $590 million.

A panel of three OSC commissioners, which held hearings earlier this year, ruled that the evidence didn't support the allegations of tipping and insider trading that were filed against the two men in early 2012.

The panel said there was no dispute that Waheed had received, while working as a consultant for Baffinland, some information about its negotiations with ArcelorMittal but the question was whether the non-public information was significant — or material — when Nunavut made its initial investments in Baffinland on Sept. 9, 2010, a few months after his consultant contracted expired.

The panel decided that Waheed — who was on contract to Bafflinland from Feb. 18, 2010, until about June 15, 2010, — wasn't in a special relationship with the junior mining company and didn't have knowledge of material facts about the ArcelorMittal negotiations at the relevant times.

Walter, who was semi-retired when he was approached by Waheed in July 2010, had been a managing director at BMO Nesbitt Burns from 1999 to 2001. In the 1980s, he had been a lawyer at a predecessor of Toronto firm Davies, Ward, Phillips & Vineberg, which advised the two men and Nunavut Acquisition during its initial takeover bid for Baffinland.

The panel decided that Walter — who had been friends with Waheed since the 1980s and helped him form Nunavut Iron Ore — didn't receive and trade on insider information because the case against Waheed hadn't been proved.

An allegation of acting contrary to the public interest, which is sometimes used by the OSC when there hasn't been a specific breach of the Ontario Securities Act, was also dismissed for several reasons.

The panel agreed with the respondents, as defendants are called in OSC proceedings, that the act doesn't "prohibit trading on the basis of non-material confidential information or rumours, speculation and suppositions."

"Having found that the respondents did not have knowledge of material facts relating to the negotiations between Baffinland and ArcelorMittal . . . we do not find it appropriate in the circumstances to find that their conduct in this respect was contrary to the public interest."

In addition, it said that any breach of Waheed's responsibility to Baffinland — who was given access to confidential information while a consultant — was a private rather than a matter of public interest.

"Given that the Baffinland board chose not to exercise Baffinland's contractual and other remedies after careful deliberation and with the benefit of legal advice, it should not, in our view, now fall to the commission to deal with matters that should be properly left to the courts."

It also found that, contrary to the allegation that the two men had an unfair advantage over other investors because of Waheed's knowledge, "no evidence of any harm suffered by investors or harm to the capital markets was provided."

Tom Atkinson, the OSC's enforcement director, said in a statement Wednesday after the ruling was made public that the regulator has a duty to investigate suspected illegal insider trading schemes and will continue to pursue cases when the evidence is compelling and when important matters of regulatory policy are involved.

"This matter was investigated and presented in a thorough and professional manner and I commend staff for their dedication throughout the process," Atkinson said in an email in response to requests for comment.

Kent Thomson, a Davies, Ward lawyer who represented Walter in the OSC proceedings, said in an interview Wednesday that his client was pleased the OSC panel had rejected "each of those allegations and, of course, dismissed the case in its entirety."

"Our basic submission was there was no substance whatsoever to the allegations of insider trading made against either Mr. Waheed or Mr. Walter, and that there was no basis whatsoever for the commission to exercise its public interest jurisdiction against either of them and the commission accepted that submission."

- Follow @DavidPaddon on Twitter.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX15265.35-200.19
S&P CDNX955.06-10.73
DJIA17279.7413.75
Nasdaq4593.426-13.637
S&P 5002010.40-0.96
CDN Dollar0.9116-0.0005
Gold1216.60-10.00
Oil92.41-0.62
Lumber329.00-0.90
Natural Gas3.903-0.064

 
Okanagan Companies
Pacific Safety0.16-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.37+0.05
Cantex0.05-0.01
Anavex Life Sciences0.223-0.0031
Metalex Ventures0.060.00
Russel Metals35.75-1.26
Copper Mountain Mining2.66-0.02
Colorado Resources0.165-0.01
ReliaBrand Inc0.0249+0.0009
Sunrise Resources Ltd0.02-0.005
Mission Ready Services0.29-0.01

 



23480

FEATURED Property
20845572509 Cobblestone Road
$749,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Is this a fair offer from ICBC?

“Is this a fair offer from ICBC?”…. “How much should I settle for?”… “What is my claim worth?” These are just some of the questions I regularly get as...


Disruptive innovation

Last night I was privileged to be able to speak at the Greater Westside Board of Trade business awards dinner. Photo: ContributedI talked about Innovation and Collaboration which are two very interes...


Executors and their duties

There will be a time when you will need to decide who you should appoint as executor of your Will. As well, there may be a time when you will be asked by someone to act as the executor of his or her W...

_








Member of BC Press Council


22962