The TMF Finds "Spring Loading" To Be Insider Trading Under The Quebec Securities Act

In its recent decision in AMF vs Filiatreault, the Tribunal administratif des Marchés Financiers (TMF) finds that: a) an accountant who was asked by the CEO to provide job opportunities for him in the near future was in possession of insider information relating to the potential sale of the issuer; and b) stock options (in favour of certain employees and board members) contemplated prior to, but voted by the board after receipt of, a verbal offer constitute insider trading as prohibited by section 187 of the Quebec Securities Act. The TMF finds that such operations are contrary to the fundamental principle of equality for all investors in terms of knowledge at the time of operations on an issuer's stock.  As such, the TMF levied administrative penalties equivalent to twice the value of the gross profits gained by each plus $20,000 for each director.