The Alberta Securities Commission has cleared current and former executives of Grande Cache Coal Corp. of illegal insider trading, ruling ASC staff failed to prove their case.
Former chief executive officer Robert Stan, former chief financial officer Anita Roncin and four others were accused of selling securities in 2008 before the company revealed bad news about missing production targets. Commission staff alleged they knew by May 26, 2008, that the company would not meet its first-quarter production targets and exercised options and sold securities improperly before the news was released on Aug. 14.
However, a hearing panel ruled this week that ASC staff did not establish “with clear, convincing and cogent evidence” that the information about production was a material fact that had not been disclosed prior to Aug. 14.
“We found that staff have not proved their allegations against the respondents, and so we have dismissed all allegations made against the respondents,” the panel concluded.
The Calgary-based coal company’s shares traded on the Toronto Stock Exchange. It was acquired last year by a consortium of investors and its shares no longer trade publicly. Mr. Stan left the company after the sale.
Despite clearing the executives, the ASC hearing panel concluded its decision with a comment to all market participants “of the care and scrutiny” that must be taken to ensure all material information is disclosed before insiders buy or sell shares, and said companies should “err on the side of materiality” and release information if there is any doubt about whether it is material.
Others cleared in the case were Eugene Nagai, who is vice-president of marketing and transportation; Timothy Riordon, former general manager; Kevin Wade, former controller; and Kathryn Stan, who is Mr. Stan’s wife.