The Mounties are being petitioned to investigate whether leaks from Ottawa triggered a sell-off in the shares of a B.C. company weeks before the Harper government blocked its plans to build an $815-million mine.
Michael Ignatieff's opposition Liberals have written to the RCMP's commercial crime unit asking them to probe what made shares of Taseko Mines Ltd. plunge nearly 40 per cent within seconds on the afternoon of Oct. 14.
It's the same type of request that parties including the Conservatives made in 2005 when they asked Mounties to look into unusual income trust trading activity shortly before the Martin government announced it would not tax trusts.
The force will determine whether there are grounds for an investigation, a move that would deal a political blow to the Harper Conservatives. The RCMP income trust probe, announced amid the 2006 election campaign, helped the Tories topple the Martin government.
Speaking to CTV's Power Play on Thursday, RCMP Commissioner Bill Elliott didn't commit to launching an official probe - and said he hadn't received the Liberal letter yet - but didn't rule one out.
"So far, I am not aware that we have had any involvement, but I anticipate, given the nature of the allegations, that it is something we would be involved in," he said.
The British Columbia Securities Commission confirmed on Thursday it is reviewing the sharp mid-October drop in Taseko stock - wild trading more than two weeks before the federal government announced on Nov. 2 that it was rejecting the proposed Prosperity gold and copper mine in the B.C. Interior on environmental grounds.
About 27 million shares changed hands on Oct. 14, compared with a daily volume average of about five million, according to Taseko.
The B.C. securities regulator said it is following up on a referral from the Investment Industry Regulatory Organization of Canada, which oversees trading activity in this country.
Citing unnamed sources, the CBC reported late on Wednesday that federal government officials fear the steep drop in the stock price may have been caused by a leak of information that the development would be rejected. The broadcaster said the Prosperity decision was made secretly, in hopes of preventing such stock market fluctuations.
Taseko CEO Russell Hallbauer has not been able to find the cause of the spike, but said he is comforted by the fact that the irregular trading is being reviewed by regulators, and possibly the RCMP.
"That is what happens if an illegal action has occurred, and so it should be. If there was inside information or information leaked or somebody did something that they shouldn't have done, I mean, people [will]get to the bottom of these things," Mr. Hallbauer said.
Some market watchers speculate that the erratic trading could be due to a "flash trade" or "fat finger trade" - unintended sales or purchases made by computer or human error. Mr. Hallbauer said this was a theory when the company first learned of the irregular trades.
"If there is nothing that has occurred, that's good. If there's something then the people who have done things that they shouldn't have should be held accountable."
"There has to be transparency in the capital markets," he added.
Challenged in the Commons, the Harper government shrugged off questions about the Taseko advance share sell-off as "pure speculation" and showed no interest in launching its own investigation.
"Share prices dropped and then two weeks later when the news came out, they went back to exactly the same place. It is an illegal act benefiting connected insiders and leaving average shareholders devastated," Liberal MP Mark Holland charged in the Commons.
"The bottom line is that government did the right thing for our environment," Government House Leader John Baird replied. He later declined to speak to reporters outside the Commons.
Finance Minister Jim Flaherty told reporters he didn't believe there was a leak. "Cabinet members, by the way, I don't know if you appreciate this ... we're not permitted to trade in securities."