According to the decision, the panel found that Finkelstein tipped Azeff while in a special relationship with Masonite International Corp., and that Azeff, Bobrow, Miller and Cheng each purchased Masonite securities with knowledge of these facts, contrary to the public interest; and, that they acted contrary to the public interest by recommending the stock to clients.
A hearing on sanctions is expected to take place on May 21 and penalties could top $1-million for each of the six violations.
Despite their assertions, the panel concluded that Finkelstein was aware that material facts surrounding the deals with undisclosed and in three cases, the OSC found that he had direct knowledge, because he was a lawyer involved in the transaction. The panel also found that he that the deal would acquire a target.
In the three other transactions, it also found that Finkelstein had knowledge of the decision to acquire the target, although he was not working on the transactions, because he accessed deal documents between the time of the decision to acquire and the public announcement.
"On a balance of probabilities, we find that the purchase of MHM shares by Azeff and Bobrow, Miller and Cheng, was timely trading motivated by the [inside information] each of them received,” the report notes.