Québec Insider Trading Decision Discusses Transactional Certainty For The Materiality Criterion

A recent decision of Québec's Financial Markets Administrative Tribunal, Autorité des marchés financiers c. Gauthier,¹ dealt with insider trading allegations around an asset management firm's proposed takeover of a Canadian energy company, Napec. Specifically, the Tribunal explored the threshold that a proposed transaction must meet in order to be considered material non-public information.

The Autorité des marchés financiers alleged that one respondent — Gauthier, an employee of one of Napec's lending banks — disclosed privileged information about Napec's impending privatization to another respondent (as well as to other friends during social gatherings), who then purchased a significant number of the company's shares, in contravention of sections 187 to 189 of Québec's Securities Act.