A Quebec Tipping Case Serves To Caution Insiders

On April 7, 2014, the Bureau de décision et de révision (BDR) ruled on an application by the Autorité des marchés financiers (AMF) seeking an administrative penalty against a director of a reporting issuer for having allegedly contravened tipping restrictions under the Securities Act (Quebec). The AMF claimed that a general comment made by the director about the general status of the business of the reporting issuer to the effect that "things were going badly" should be considered as "privileged information" and could lead to a violation of tipping restrictions. (Tipping prohibitions under the securities acts of other Canadian jurisdictions refer to "material fact" and "material change" rather than "privileged information" but have the same purpose, namely ensuring that the investing public has equal access to information relating to reporting issuers.)