tim kiladze

Globe and Mail Update

Published Tuesday, Feb. 07, 2012 4:41PM EST

Last updated Tuesday, Feb. 07, 2012 6:13PM EST

The Ontario Securities Commission is investigating its second high-profile insider trading case in as many months, signalling to Bay Street that it is cracking down on enforcement.

The latest probe involves 10 different people, including Goldcorp Inc. (G-N15.830.231.47%) chairman Ian Telfer, and Dennis Wing, a founding partner of investment bank First Marathon Securities. However, the case centres on Eda Marie Agueci, a former executive assistant at GMP Securities, who the OSC alleges tipped off others about pending transactions for which her firm acted as an adviser.

More related to this story

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Improving corporate oversight, part one

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Improving corporate oversight, part two

As for Mr. Telfer, the OSC noted that he did not participate in the insider trading scheme, but alleges that he helped Ms. Agueci to hide some trading activity and thereby acted contrary to the public interest.

It is the second time this year that the OSC has targeted high-powered mining executives for insider trading and tipping. In January, the OSC accused Jowdat Waheed and Bruce Walter of illegal insider trading, alleging that they profited from inside information only they were privy to during the prolonged takeover battle for Baffinland Iron Mines Corp.

In the latest case, the OSC claims that the illegal activities generated profits of about $962,000 and that Ms. Agueci received direct and indirect payments that amounted to $25,000 in relation to this trading. To make this money, Ms. Agueci passed along material non-public information about takeovers that involved Canadian stocks such as Yamana Gold Inc. (YRI-T16.80-0.07-0.41%) and HudBay Minerals Inc. (HBM-T12.02-0.21-1.72%)

Yet she isn’t the only person who benefitted, it is alleged. After tracking a number of takeover battles, the OSC alleges that Ms. Agueci tipped off a number of her friends and family, creating what the commission has deemed to be “trading rings.” The first of these was formed in 2007 during a takeover of NU Energy Uranium Corp. by Mega Uranium Ltd. (MGA-T0.330.013.13%) Ms. Agueci was tipped off about the takeover, according to the OSC, by Jacob Gornitzki, an outside adviser who was working for NU from GMP’s offices.

According to the OSC’s statement of allegations, after the executive assistant thanked Mr. Gornitzi for the tip, he replied: “You will not regret” and “Don’t worry.” Right after, Ms. Agueci told her family and friends that they “must buy” shares of NU and that “actions begin next week.”

Mr. Wing, one of the founding partners of First Marathon, was one of the individuals who the OSC alleges bought NU shares. Telling a friend that Mr. Wing wanted to buy her dinner to thank her for the tip, she said: “I have better ways of being thanked.....$$$$$.”

Although Mr. Telfer is not named in any of the trading rings, the OSC says that he and Ms. Agueci were friends for many years and he assisted her with trading in accounts that were not monitored by GMP. In 2008, Mr. Telfer helped Ms. Agueci and her brother buy 500,000 common shares in 222 Pizza Express Corp., and then told her to keep the transaction quiet. He also told her to communicate only by BlackBerry PIN messaging so that GMP’s e-mail servers could not track their exchanges.

The OSC alleges that Mr. Telfer was acting against the public interest because “he knew or ought to have known that she was prohibited from engaging in undisclosed securities transactions.”