TORONTO – A former legal assistant with one of Canada's most prominent law firms has been charged with illegally passing privileged information on a series of high-profile takeover bids, including Valeant Pharmaceuticals International Inc.'s failed run at Allergan Inc., regulators said Friday.
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The Ontario Securities Commission issued a statement Friday alleging in a civil case that deal tips leaked by Donna Hutchinson, formerly with Davies Ward Phillips & Vineberg, enabled a group of friends to illegally make more than two million Canadian dollars (US$1.6 million).
Ms. Hutchinson allegedly shared confidential details of seven pending takeovers over a four and a half year period ended in April 2016 with her one-time boyfriend and Toronto broker Cameron Cornish. Mr. Cornish, in turn, shared the deal secrets with two friends who used a variety of brokerage accounts, including some based in Panama and Bermuda, to purchase shares and options of the target companies, the OSC said.
Mr. Cornish's friends, according to the OSC, are David Sidders, who is based in Bermuda, and Patrick Caruso, of Toronto. They couldn't be immediately reached for comment, and their lawyers were unknown. No other individuals were named in the allegations.
The OSC also said it had uncovered evidence of similar trading at a Panamanian brokerage that was used for some of the alleged insider trades. This trading earned a profit of C$1.3 million.
In addition, an unnamed officer at the Panamanian brokerage, identified as "Person W," also engaged in similar trading for more than three years, earning a profit of more than C$208,000 on the trades, the regulators' statement said. No charges have been made in connection with these trades.
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Ms. Hutchinson didn't return requests for comment posted via Facebook and LinkedIn, and Mr. Cornish didn't return a message at Brant Securities, where he is listed as a trader, according to a LinkedIn profile.
Davies' managing partner, Shawn McReynolds, said in a statement that Ms. Hutchinson was fired after the firm became aware of the allegations. He said the multiple tips were "isolated" to Ms. Hutchinson and were a "flagrant breach of our policies on confidentiality."
Davies represented Pershing Square Capital Management LP, which teamed up with Valeant's failed $48.3 billion bid for Allergan in 2014.
Other deal secrets that Ms. Hutchinson allegedly shared with Mr. Cornish before the news became public included the 2014 takeover by Burger King Worldwide Inc. of Canadian fastfood retailer Tim Hortons Inc., and the 2011 acquisition by Poland's KGHM Polska Miedz SA of Canada's Quadra FNX Mining Ltd. Davies was an adviser to Burger King and KGHM.
Write to Jacquie McNish at Jacquie.McNish@wsj.com
(END) Dow Jones Newswires
September 22, 2017 16:22 ET (20:22 GMT)