Advisors caught up in insider trading allegations

Advisors caught up in insider trading allegations

Advisors caught up in insider trading allegations Several advisors are now in hot water for acting on a tip from a securities lawyer -- a move that runs afoul of the OSC.

The Ontario Securities Commission pinned the accusations against Mitchell Finkelstein, who lost his gig with Davies Ward Phillips & Vineburg after the OSC launched an official investigation in 2010, alleging the lawyer fed tips to Paul Azeff, a CIBC investment advisor in Montreal who was an old fraternity friend.

"They assert that they had good reason, based on due diligence, to purchase the target shares and no motivation to engage in illegal activity that they understood, as professionals and registrants, would prejudice their successful careers," the OSC report alleges.

The decision represents a rare victory for the OSC as it’s one of the few times they’ve successfully prosecuted lawyers, bankers, brokers, or financial advisors for crossing inside trading boundaries. The decision is also a rare for the regulator in a tipping case. These types of cases can be extremely difficult to prove since the evidence is almost always circumstantial.

Several others, Korin Bobrow, also from Montreal, and Howard Miller and Francis Cheng, both from Toronto, were proven to have connection with three transactions. All were accused of participating in illegal insider trading in six instances involving inside information about pending M&A deals from November 2004 to August 2007.

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  • Bob T 2015-03-27 12:13:23 PM
    I, for one, am pleased to see this action by the OSC. Insider trading is completely unacceptable. Not only does it affect the reputation of the markets but it continues to lead people to believe that there is some magical way of finding out what is happening before some others.
    The typical person coming to me with a tip has no idea that what they are doing is potentially illegal. If they really have knowledge that is based on information that is not available to the general public then they should not trade the security.
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