VANCOUVER, Sept. 10, 2012 /CNW/ - The Supreme Court of Canada has dismissed Kegham Kevin Torudag's
application for leave to appeal a November 2011 decision of the British
Columbia Court of Appeal, which upheld a British Columbia Securities
Commission decision that he engaged in illegal insider trading.
Torudag helps reporting issuers to raise money and performs investor
relations activities for them, including assistance in "getting their
story out" to investment analysts and investors. He is an active
trader in junior public companies, primarily in the resource sector,
and in recent years has made a significant portion of his living by
trading on the TSX-Venture Exchange.
During his original hearing with the BCSC, Torudag admitted purchasing
shares in Icon Industries Limited while being a person in a special
relationship with Icon and having undisclosed material facts about the
company, in contravention of BC's insider trading rules. He admitted
the contravention, subject to the defence in the rules - that he
reasonably believed that the material facts had been generally
disclosed when he purchased the Icon shares.
Based on Torudag's admissions, the commission panel found that he
contravened BC's insider trading rules, and that he did not establish a defence
under the rules. The panel found that Torudag, before purchasing the
Icon shares, did not hold a reasonable belief, and failed to take all
reasonable steps necessary to establish, that the material facts about
Icon had been generally disclosed.
Also at the original hearing, Torudag claimed he was not subject to the
BCSC's jurisdiction or the Securities Act because he was not in BC when he conducted the trades. The panel
disagreed. In the Court of Appeal, Torudag argued that was the sole
issue to be decided. The Court of Appeal dismissed the appeal and
upheld the commission's view that because the BCSC regulates the
Venture Exchange, they can prosecute illegal insider trading on the
Venture Exchange. In effect, anyone who trades on the Venture Exchange,
regardless of their location, is subject to the Securities Act.
In March 2009, a commission panel ordered, with limited exceptions, that
Torudag cease trading securities for one year, and also ordered that he
pay a fine of $36,771. These penalties, which were stayed during the
original appeal and again during the application for leave to appeal to
the Supreme Court, are now active again. Torudag has paid his financial
sanction. The cease trade order will remain in effect until April 17,
The BCSC is the independent provincial government agency responsible for
regulating trading in securities within the province. You may view the
original decision on our website, www.bcsc.bc.ca, by typing Torudag or 2009 BCSECCOM 339 in the search box. Information
regarding disciplinary proceedings can be found in the Enforcement section of the BCSC website.
Please visit the Canadian Securities Administrators' Disciplined Persons List for information relating to persons disciplined by provincial
securities regulators, the Investment Industry Regulatory Organization
of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA).
Learn how to protect yourself and become a more informed investor at www.investright.org
SOURCE: British Columbia Securities Commission
For further information:
If you have questions, contact Richard Gilhooley, media relations, 604-899-6713.For public inquiries, call 604 899 6854 or 1 800 373 6393 (toll free).