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OSC Applies Insider Trading Principles to a Non-Reporting Issuer as a Matter of "Public Interest"

April-8-2015

Lawyer Brenda Gosselin
Area Corporate Finance and Securities

Summary

The Ontario Securities Commission (OSC) issued an Order approving a settlement agreement between OSC staff (“Staff”)and Anand Hariharan in connection with insider trading allegations against Hariharan regarding his trading of a non-reporting issuer’s option contracts (the “Settlement Agreement”).  Notably, in deciding to issue the Order, the OSC applied insider trading principles contemplated by Ontario’s Securities Act (the “Act”) to a non-reporting issuer as a matter of “public interest” pursuant to sections 127 and 127.1 of the Act.  The OSC found Hariharan’s misuse of material confidential information impugned the integrity and fairness of the capital markets, notwithstanding his conduct did not technically contravene the insider trading prohibitions set out in section 76(1) of the Act because the option contracts were not those of an Ontario reporting issuer.

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