March 16, 2009
BCSC panel finds two Quebec residents traded illegally on insider information
Vancouver - A British Columbia Securities Commission panel has found that two Quebec residents illegally purchased the shares of a publicly traded company before it had disclosed material facts to the market.
Kegam Kevin Torudag and Lai Lai Chan admitted to buying the shares of Icon Industries Limited, a TSX Venture Exchange listed issuer, before the company’s acquisition of mineral claims was generally disclosed. They also admitted to knowing about the mineral claims acquisition and to being in a special relationship with Icon when they bought the shares on March 13, 2007.
At the hearing, Torudag claimed his trades were legal because the trading he saw in the market led him to reasonably conclude that the Icon acquisition had been generally disclosed.
The panel disagreed, finding that it was not reasonable for Torudag to assume, based on the trading he saw, that the Icon acquisition had been generally disclosed. The panel also found that Torudag failed to take reasonable steps to establish whether the material facts he knew about were generally disclosed to the market.
Torudag also argued the BCSC did not have jurisdiction over the trades. The panel found that the commission had jurisdiction because most of the trades involved B.C. market participants and took place on the TSX Venture Exchange, which the BCSC directly regulates.
The panel found that both Torudag and Chan illegally traded securities, and it directed the parties to make submissions on sanctions according to the schedule set out in the findings.
The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the decision on our website www.bcsc.bc.ca by typing in the search box Kegam Kevin Torudag, Lai Lai Chan or 2009 BCSECCOM 145. If you have questions, contact Ken Gracey, media relations, 604-899-6577.
Learn how to avoid investment fraud at the BCSC's investor education website: www.investright.org.