A former CEO has been fined $125,000 for misleading OSC staff during an insider trading investigation, an OSC hearing panel said.
From 2006 to 2014, Eric Tremblay was CEO and chairman of the board of Aston Hill Financial Inc. (AHF) and the ultimate designated person of Aston Hill Asset Management Inc. (AHAMI), a subsidiary of AHF.
During the OSC investigation, Tremblay admitted to making misleading statements about his knowledge of insider information pertaining to an acquisition by Amaya Inc.
Benedict Cheng, former AHF president and co-chief investment officer at AHAMI, knew about Amaya’s acquisition before it was announced on June 12, 2014, says the settlement agreement. Cheng passed the information to John David Rothstein, senior vice-president at AHAMI at the time. Rothstein then passed on the information to Frank Soave, a first vice-president and investment advisor at CIBC Wood Gundy.
The possible insider trading was subsequently discussed by Tremblay, Cheng and other staff of AHF and AHAMI at meetings in Rio de Janeiro, a poolside cabana in the Dominican Republic and the Bymark restaurant in Toronto.
“By about June 30, 2014, Tremblay was aware that Rothstein obtained material facts concerning Amaya from Cheng that had not been generally disclosed,” the settlement agreement says. Under oath, Tremblay denied he was aware.
In addition to the fine, Tremblay has been ordered to pay costs of $10,000. Further, for two years, he is banned from trading in securities or derivatives or from acquiring securities, and from becoming or acting as a director or officer of any issuer, registrant or investment fund manager. For the same period, he is also prohibited from acting as a registrant, investment fund manager or promoter.
Tremblay is no longer a registrant nor does he work in the capital markets, the settlement agreement says.
A settlement agreement earlier this year indicates Cheng was fined $400,000 including costs, with associated prohibitions on trading and acting as an executive officer. A 2017 settlement agreement says Rothstein was fined $11,000 including costs, with associated prohibitions on trading and acting as an executive officer. Case proceedings continue today.
Read the full settlement agreement here.