ASC settles with Medicine Hat broker for illegal insider trading and tipping

CALGARY, April 14 /CNW/ - The Alberta Securities Commission (ASC) concluded a settlement agreement with Richard Bruce Kowalchuk, a former investment advisor with CIBC Wood Gundy in Medicine Hat, Alberta.  The agreement imposes 10-year market bans on Kowalchuk as well as penalties and costs in the amount of $210,000.

Kowalchuk admitted that he purchased shares in Eveready Inc. in 2009 with knowledge of the impending acquisition of Eveready by Clean Harbors, Inc. at a price significantly above the then market price for Eveready shares.  That information not yet been generally disclosed to the public but was known only to insiders and to those improperly tipped by insiders.  Kowalchuk admitted he was tipped by a member of Eveready's Board of Directors, John Herbert Holtby.

Kowalchuk also admitted that he, Holtby, and James Roger Douglas opened, in Douglas's name, a jointly-owned trading account that was designed to permit Holtby to trade in Eveready shares when he was otherwise forbidden from doing so by securities laws related to insider trading.  On Holtby's instructions and executed by Kowalchuk through his position as investment advisor, the three of them traded extensively in Eveready shares in advance of the announcement of the Clean Harbors acquisition.  That account, which holds their jointly-owned profits, has been subject to a Freeze Order of the ASC's Executive Director since May 3, 2010.

Kowalchuk further admitted he illegally tipped Jeffrey Scott Bratvold, Neil Donald Tanner and Randall George Kowalchuk about the impending acquisition of Eveready.  He also encouraged a number of his clients to purchase Eveready shares before the acquisition of Eveready was announced.

A copy of the Settlement Agreement and Undertaking is available on the ASC website at www.albertasecurities.com, as is the Notice of Hearing related to the other individuals named above.

The ASC is the regulatory agency responsible for administering the province's securities laws. It is entrusted to foster a fair and efficient capital market in Alberta and to protect investors.  As a member of the Canadian Securities Administrators, the ASC works to improve, coordinate and harmonize the regulation of Canada's capital markets.

SOURCE Alberta Securities Commission

For further information:

For Media Inquiries: 

Lorinda Brinton
Senior Advisor, Investor Education
403.297.2665
   
For Investor Inquiries: 
ASC Public Inquiries
Toll Free 1.877.355.4488

 


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