TORONTO — The Ontario Securities Commission has launched an insider trading probe involving a former employee of venerable Canadian investment bank GMP Securities.
The probe, alleging illegal profits totalling some $962,000, centres on Eda Marie Agueci, a former executive assistant at GMP who is accused of tipping others about pending transactions for which her firm acted as an adviser, and of trading in the stocks of those companies herself.
Among those named in the statement of allegations by the OSC staff is well-known mining industry executive Ian Telfer, chairman of Goldcorp Inc. (TSX:G).
Telfer is not accused of participating in insider trading himself, but the OSC staff alleges he helped facilitate the alleged illegal conduct of Agueci and her brother-in-law, Santo Iacono, a partner in S.I.R. Investment Inc., a food services distribution company, during the relevant period.
The allegations have not been proven and Telfer has issued a statement describing them as “completely without merit” and saying he plans to vigorously defend against them.
“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,” Telfer said in a statement after the allegations were made public.
“There is no allegation that I breached any securities law or that I was involved in any insider trading scheme,” Telfer said, adding that he was “very disappointed that the OSC is trying to stretch its jurisdiction to suggest that there is something wrong with agreeing to include someone’s relative in a private placement.”
Agueci, as an executive assistant to the chairman and to the mining group of the investment banking department of GMP Securities L.P., is alleged to have acquired through her employment or from others material non-public facts concerning pending corporate transactions, which she would communicate to other respondents.
“In doing so, she repeatedly engaged in unlawful tipping, contrary to subsection 76(2) of the Securities Act,” it said.
The OSC said respondents who received such information from Agueci would then trade in securities of the reporting issuers “with knowledge of material facts . . . that had not generally been disclosed, thereby engaging in illegal insider trading.”
In some cases, the respondents are accused of informing others of such material facts and recommending investing to them or of having made “payments to Agueci in relation to their illicit trading.”
“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 said.
In addition, Agueci is alleged to have received direct and indirect payments totalling $25,000 from Dennis Wing who, during the relevant period, was president and chief executive officer of registered investment dealer Fort House Inc..
In order to conceal the unlawful trading activity, certain respondents are alleged to have used deceptive techniques, including avoiding the use of stock symbols in correspondence in order to avoid detection by GMP’s compliance department, the OSC said.