Alberta regulators have accused a former employee of Pembina Pipeline Corp. of illegal insider trading, alleging she advised her husband to buy shares of Provident Energy Ltd. after she learned her employer was considering a takeover bid for the gas company.
The Alberta Securities Commission alleges Sherry Hagerty learned about a possible Pembina bid for Provident in December, 2011, and told her husband, Gary Hagerty, about the deal. At the time, the ASC said Ms. Hagerty was Pembina’s corporate risk manager while her husband worked on contract for the company.
The regulator alleges Mr. Hagerty bought 5,000 shares of Provident the following day. After the takeover bid was announced publicly in early 2012, the regulator said Mr. Hagerty sold the shares for a profit of $9,942.
The ASC has accused the couple of breaching illegal insider trading rules and acting “contrary to the public interest” with their trading. They are also accused of making untrue statements to ASC investigators.
The regulator said Ms. Hagerty first learned of the deal “informally or otherwise” on Dec. 22, 2011, which was the same day that a special committee of Pembina’s board authorized a revised takeover proposal be presented to Provident, and Provident notified Pembina that it was prepared to proceed with talks under the terms of the proposal.
The following morning, Ms. Hagerty was formally advised of the deal by Pembina’s general counsel and was told that, as an insider, she was prohibited from trading shares of either company, the ASC said.
Later that morning, the ASC alleges Mr. Hagerty bought shares of Provident at $9.89 each. He sold them on Feb. 8, 2012, for $11.88 apiece, several weeks after Pembina issued a news release announcing it had reached an agreement to purchase Provident.
A Pembina Pipeline spokeswoman said Tuesday the company had no comment on the allegations because they involve an ongoing legal matter.