News Release
B.C. Securities Commission Finds John Pyper Engaged in Frontrunning
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Date:
2000-03-31 -
Number:
2000/16
Released: 03/27/00 Contact: Michael Bernard
899-6500
(BC only) 1-800--373--6373
Vancouver – A British Columbia Securities Commission panel has found that John Pyper contravened the frontrunning prohibition in the Securities Act.
Frontrunning generally refers to using information obtained as a result of managing the investment portfolios of others for personal benefit.
On four occasions in April and May, 1997, Pyper, an equity analyst formerly employed by a Vancouver-based portfolio manager, sold short shares of thinly traded companies for his own account. He then ordered the sale of shares from the portfolio manager’s accounts and, while these sale orders were being filled, he covered his short position. Short sellers borrow shares owned by other investors and sell them, in the hopes of later repurchasing the shares at a lower price, at a profit.
He sold the shares from the portfolio manager’s accounts in a manner intended to depress the price of the shares. The share prices did decline, enabling Pyper to cover his short position at a profit, which totalled about $13,000, before commissions.
The panel was told that the portfolio manager had reimbursed its clients for the losses they suffered as a result of Pyper’s frontrunning.
Pyper’s credibility was a central issue in the commission’s 10 day hearing. The panel did not believe Pyper. Further, in its findings, the panel found Pyper’s assertion that others had lied to be without foundation. "The systematic attempts by Pyper to denigrate the testimony and conduct of others, without having a shred of evidence to support his position, are quite inappropriate."
The panel has asked for submissions in April from Pyper and from commission staff before issuing any orders under the Act. Orders could include banning him from the B.C. securities market and imposing administrative penalties.
Copies of the decision are available on the commission’s website (www.bcsc.bc.ca) or by contacting Communications Manager Michael Bernard. The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities and exchange contracts within the Province.