Former investment banker Bruce Moore has agreed to pay almost $850,000 to U.S. and Canadian regulators to settle allegations he improperly traded shares through offshore accounts using private information he gleaned in his work at major brokerage firms.
The Ontario Securities Commission approved a settlement agreement with Mr. Moore at a hearing Tuesday, approving $504,000 of payments and imposing a 15-year ban on working as a registrant in the investment industry and a 10-year ban on trading shares of public companies.
Also Tuesday, the U.S. Securities and Exchange Commission said Mr. Moore has agreed to pay $340,000 (U.S.) to settle with the U.S. regulator over his purchase of American depository receipts of British manufacturer Tomkins PLC, which traded on the New York Stock Exchange. The U.S. settlement includes a ban on working in the securities industry.
At the OSC hearing Tuesday, Mr. Moore stood to be formally reprimanded for his conduct by OSC commissioner Edward Kerwin, who said the payments in the case “are not insignificant” and the penalties should influence others who work in similar roles.
“I expect this experience and sanctions ordered against you will deter you and others from repeating this conduct in the future,” Mr. Kerwin said.
Mr. Moore made no comment at the hearing or afterward to reporters, but his lawyer, Linda Fuerst, told the hearing he regrets his behaviour.
“He has expressed remorse for his conduct and has taken responsibility for it through entering into the settlement agreement,” Ms. Fuerst said.
Mr. Moore was accused of buying shares of Tomkins in 2010 using an offshore bank account in the Channel island of Jersey after guessing the company was going to be the subject of a takeover bid by the Canada Pension Plan Investment Board and partner Onex Corp.
He was a managing partner in CIBC’s investment banking operation at the time, and knew CPPIB was looking for $2-billion (U.S.) in financing for a major deal. He admitted in the settlement agreement that he guessed the target after seeing a CPPIB executive speak with the CEO of Tomkins at a charity event.
In 2012, while working as a managing director at UBS, he bought shares of Homeq Corp. after he received an e-mail from a client at Birch Hill Equity Partners, who inadvertently sent him confidential information about a takeover bid for Homeq. The Birch Hill client used the auto-complete function on his e-mail to fill in the address of recipient, and accidentally sent the e-mail to the wrong person.
Mr. Moore earned a profit of about $318,000 (Canadian) on the shares he purchased of both companies.
The OSC said it only learned of Mr. Moore’s trading in the Homeq shares after he brought it to the commission’s attention while investigators were probing the Tomkins trading. As a result of his voluntary disclosure, the OSC said he earned credit that reduced his penalties in the case.
He resigned his position at UBS immediately prior to alerting the OSC to his Homeq trading, the settlement agreement says.
Among the terms of the settlement, Mr. Moore will only be allowed to trade in mutual funds, exchange-traded funds or index funds for retirement savings plans or education savings plans, and can also buy shares of private issuers whose shares do not trade publicly.
Ms. Fuerst said the prohibitions leave Mr. Moore with room “to participate in the capital markets” with private companies that are not reporting issuers.
The OSC settlement included a $43,268 payment to “disgorge” the profits he earned from the Homeq trading, an administrative penalty of $86,000 for the Homeq trading, and OSC costs of $75,000. He also voluntarily offered to pay the OSC $300,000 over the Tomkins trading.