The U. S. Securities and Exchange has formally ended its insider-trading investigation of Toronto investor John Fraleigh without filing any charges.

The SEC quietly filed a "stipulation of dismissal of action without prejudice" in U. S. District Court in New York on Oct. 24. The regulator also lifted a November, 2005, order freezing more than US$4-million in assets of Mr. Fraleigh.

The SEC was probing alleged insider trading in shares of Placer Dome Inc. ahead of its takeover bid by Barrick Gold Corp. in the fall of 2005.

The SEC decision comes nearly two years after the Ontario Securities Commission closed a parallel investigation against Mr. Fraleigh for the same trading activity, also without filing any charges.

The initial SEC complaint alleged there was suspicious trading in Placer Dome call options in the days before the takeover bid. The SEC sought to question witnesses from three countries, including former employees of Barrick and members of Mr. Fraleigh's family.

Mr. Fraleigh declined to comment yesterday, but he has previously denied any wrongdoing.

His lawyer Alistair Crawley said Mr. Fraleigh is relieved the investigation is over.

"It has been three years since the accounts were frozen. There was also a thorough review by the OSC," Mr. Crawley said. "We are disappointed that it has taken three years to be vindicated."

The lawyer representing the SEC in its investigation did not respond yesterday to a request for comment.

The Placer Dome probe was the second time the OSC froze trading accounts controlled by Mr. Fraleigh. In 2001, there was a freeze as part of its investigation of former RBC Dominion Securities Inc. executive Andrew Rankin on insider-tipping allegations. The OSC said in 2004 it would not be taking any action against Mr. Fraleigh in that case.

Mr. Fraleigh has an ongoing lawsuit against RBC because of information that it passed on to the OSC.

The lawsuit accuses RBC of negligence, injurious falsehood and conspiracy. The bank has denied all allegations in the civil suit.

In a 2004 court hearing connected to the lawsuit, RBC said it is immune from liability for any information it passed to the OSC as part of an enforcement investigation by the regulator.

skari@nationalpost.com