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Ontario’s securities watchdog has approved a settlement with Peter Volk over allegations that he traded on insider information while acting as general counsel for Pacific Rubiales Energy Corp.

Pacific Rubiales, which has since been renamed Frontera Energy Corp., was in talks with two potential buyers about a possible acquisition at the time that the trades took place.

As part of the settlement, Mr. Volk has been reprimanded by the Ontario Securities Commission and has agreed to make a voluntary payment of $30,000, plus an additional $10,000 in legal costs.

He has also agreed to complete an educational program within two years and to seek external legal advice for all future trades where he is an insider for the next two years.

Mr. Volk purchased US$100,000 worth of shares of Pacific on Feb. 13, 2015.

At the time, he was aware that ALFA S.A.B. de C.V., a Mexican conglomerate, had been given access to confidential Pacific information in order to conduct due diligence regarding a potential acquisition.

Mr. Volk also knew that Harbour Energy Ltd., an investment firm focused on the energy sector, was in the midst of performing such due diligence in advance of potentially making an offer.

“The respondent was in a position of high responsibility and trust and was subject to a high professional standard to avoid any appearance of conflicts of interest and any appearance of misuse of confidential information related to Pacific,” the settlement agreement reads.

However, Mr. Volk’s position is that he had made a determination that the undisclosed information was not material to Pacific, according to the settlement. He also earned no profit from the trades and, in fact, lost most of his investment because Pacific entered bankruptcy proceedings.

In an e-mail, Mr. Volk said he is “very glad” the settlement has been approved and that he can now put the matter behind him.

He added that the case illustrates that senior participants in the Canadian capital markets should “err on the side of extreme caution,” even in instances where a determination has been made, in good faith, that undisclosed information is not material.

“In other words, even if the law has not been broken, if there is any grey area involved, you should be cautious and refrain from trading,” Mr. Volk said.

Editor’s note: The length of time given to complete the educational program has been corrected in the online version of this story.

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