As insiders of Synenco Energy Inc. feverishly negotiated a takeover bid last spring, they did not know the progress of their talks was being monitored by an unseen observer.
Regulators revealed Monday that an information technology analyst working at TD Securities Inc. in Calgary was reading the personal e-mails of investment bankers working on the deal, and bought Synenco securities using undisclosed information about a pending offer from French energy giant Total SA.
Although based in Calgary, Fadi Hurani admitted he traded through a brokerage account set up in Montreal under a relative’s name.
The investigation comes amid a string of recent cases in which people apparently far from the inner circles of corporate power have been accused of trading on information they allegedly obtained by illicitly reading e-mails.
While it appears no senior officials involved in any of the recent cases knew their companies’ confidential information had been breached, regulators say firms are responsible for ensuring critical e-mail is not intercepted.
Alberta Securities Commission spokeswoman Tamera Van Brunt said companies “must remain vigilant” in securing insider information that is communicated by e-mail.
“It is up to each company to ensure the security of insider information, whether it is transferred electronically or physically, and stress to staff the importance of security and the possible consequences of using insider information,” she said.
Most of the recent cases involve people who had access to e-mails by working in information technology jobs, or by knowing people in such positions.
Two weeks ago, for example, the Ontario Securities Commission accused a former employee of Celestica Inc. of illegal insider trading, alleging he had obtained unauthorized access to e-mails of the company’s executives.
The OSC alleged Rajeev Thakur made a profit of $640,000 after allegedly obtaining access to e-mails of senior executives from his sister, who worked in the information technology department. Mr. Thakur was a director in Celestica’s Business Processing Outsourcing Strategies division, but was not a senior executive. The regulator’s allegations have not been proved.
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