Alberta regulators have accused five top executives of Grande Cache Coal Corp. of illegal insider trading, alleging they sold securities in 2008 before the company disclosed bad news about its sales.
The Alberta Securities Commission said Grande Cache officials – including chief executive officer Robert Stan and former chief financial officer Anita Roncin – knew by May 26, 2008, that the company would not meet its production targets for the first quarter, ended June 30, but the news was not disclosed until Aug. 14, when the company reported its first-quarter financial results.
From May 27 to July 14, executives of the Calgary-based coal company exercised options or sold securities of Grand Cache while in possession of material facts that had not been publicly disclosed, the ASC alleged.
The regulator said Mr. Stan's wife, Kathryn Stan, also sold securities in the same period. She is also named in the ASC case.
The other executives facing allegations in the case are Eugene Nagai, vice-president of marketing and transportation; Timony Riordon, general manager; and Kevin Wade, controller.
The ASC said Grande Cache depleted its coal inventory stores in order to meet its sales targets for the year ended March 31, 2008, and issued new targets in April of that year for the new fiscal year. After the new targets were released, the ASC said the company's new underground coal mine “unexpectedly entered an extended development phase, which significantly reduces coal production.”
By May 26, the ASC said production from Grand Cache's two mines was significantly below target for the first quarter, and the company knew it would miss its forecast sales volume by almost 40 per cent.
The commission said all the accused except for Robert and Kathryn Stan exercised options and sold shares of Grand Cache between May and July. Mr. Stan is accused of exercising options during the period, while Kathryn Stan is accused of selling unidentified securities.