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Quebec’s securities watchdog has filed insider-trading charges against a former executive at pension fund giant Caisse de dépôt et placement du Québec and two other individuals, alleging that they either leaked or acted on confidential information about developments at food distributor Colabor Group Inc.

The Autorité des marchés financiers (AMF) said Wednesday that it has initiated criminal proceedings against former Caisse vice-president Justin Méthot as well as against Jean-François Neault and Claude Gariépy, two former Colabor senior executives.

Mr. Méthot and Mr. Neault were charged with communicating privileged information about Colabor while Mr. Gariépy was charged with trading on privileged information, the AMF said in a statement.

A probe by AMF investigators found that Mr. Méthot learned about the departure of then-Colabor chief executive Lionel Ettedgui before it was announced publicly on Aug. 19, 2019, and passed on the information to Mr. Neault, the watchdog said. Mr. Neault in turn passed on the tip to “several other people,” including Mr. Gariépy, ahead of the official announcement, the AMF said.

“Claude Gariépy sold all of the Colabor shares he held as soon as he learned the information, allowing him to avoid a loss from the drop in the company’s stock following the announcement,” the AMF said. Mr. Gariépy was Colabor’s chief executive officer until March, 2018. He was replaced by Mr. Ettedgui.

News of the AMF’s investigation of Mr. Méthot and other executives has been known since April and has sparked alarm among some political leaders in Quebec City, with Liberal Party finance critic Carlos Leitao saying it is “troubling” for an organization with the credibility and reputation of the Caisse. The pension fund is among Quebec’s most powerful institutions and had assets of $420-billion at the end of 2021.

The investigation has also cost Mr. Neault his job. Innergex, which hired Mr. Neault as its finance chief after he left Colabor, said in April that Mr. Neault was fired after the company learned of the AMF probe through the media.

Innergex chief executive Michel Letellier told The Globe and Mail in an interview this past spring that it was told a confidentiality order imposed by the regulator barred Mr. Neault from discussing the probe with other individuals under investigation as well as with his employer.

What was known about the securities regulator’s probe has come largely from court documents, namely its applications to the Quebec Superior Court to hold on to cellphones and other items it seized in searches, including Caisse’s Montreal headquarters, as it works on its investigation. The AMF also obtained search warrants but documents it filed to support its request for them have been sealed by the court.

Mr. Méthot issued a statement in April saying he did nothing wrong. “Neither the Caisse nor I have any knowledge of, or involvement in, the alleged transactions,” Mr. Méthot said in his statement. “Consequently, neither the Caisse nor I benefited directly or indirectly from these transactions.”

A public-relations spokesman for Mr. Méthot, Patrick Howe, said Wednesday that Mr. Méthot is bound by a confidentiality agreement with the AMF and “can’t go further” than his April statement. “He can’t talk about the case,” Mr. Howe said.

Stikeman Elliott lawyer Stéphanie Lapierre, who represents Mr. Neault, declined to comment Wednesday. The Globe was not able to reach Mr. Gariépy.

Catherine Robitaille, spokeswoman for Quebec Finance Minister Eric Girard, declined to comment, saying the matter was before the courts. The Finance Ministry has legislative oversight over the Caisse.

Caisse spokeswoman Kate Monfette has said that the pension-fund manager itself was never the subject of AMF questioning and neither were its transactions, and added that Mr. Méthot has not been an employee of the pension fund for two years. She declined to comment when contacted Wednesday.

Mr. Méthot was a 16-year veteran of the Caisse who was a vice-president with responsibilities for investments in Quebec companies before he left the organization in April, 2020, according to his LinkedIn profile. In his statement, he said he always carried out his duties with professionalism, rigour and “impeccable ethics,” including when it required him to handle highly sensitive information.

The Caisse is a shareholder in Colabor, with an unspecified stake of at least 5 per cent, according to Colabor’s annual management circular filed in March. Under the terms of a subscription agreement struck between the Caisse and the company in 2013, the pension fund has the right to propose a director for election on the Colabor board as long as it stays at or above that 5-per-cent threshold.

The AMF has said that it is among the provincial securities regulators with the strongest enforcement records but it failed to win a conviction or sanction of any sort in its previous major insider-trading case. A judge in 2018 stayed insider-trading charges against David Baazov, the former chief executive of gambling company Amaya, and two other men, saying the AMF showed a “lack of rigour” in prosecuting the file.

The AMF lost because of what the judge characterized as a failure to meet its duties and obligations to offer timely disclosure of evidence and properly protect solicitor-client privilege. That in turn jeopardized the integrity of the legal process, the judge said.

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