Ontario's Superior Court has rejected a bid by a University of Toronto law professor to force The Globe and Mail to disclose the sources behind a story involving the 2008 BCE Inc. takeover bid.
Jeffrey MacIntosh lost $36,000 selling his BCE call options, and wanted to unmask The Globe's sources and to lay the groundwork for a class action alleging the information provided by the confidential sources caused his losses.
Mr. Justice Edward Belobaba disagreed in a decision on Friday. "The level of wrong-doing was minimal to non-existent. … There is little to no public interest in compelling disclosure," the judge wrote, and "unless the media can offer anonymity in situations where sources would otherwise dry up, freedom of expression in debate on matters of public interest would be badly compromised. Important stories will be left untold," the judge wrote.
In 2008, the Ontario Teachers' Pension Plan and a U.S.-based equity firm were behind a $35-billion takeover bid of BCE.
On June 30, a week after the Supreme Court of Canada cleared legal hurdles for the bid, The Globe reported that talks between the buyers and lenders had become fractious and that the deal might not close by Christmas.
Prof. MacIntosh, who had committed to 35,000 BCE call options and expected to earn half a million dollars, sold at a loss two days after the article was printed.
Judge Belobaba wrote that BCE stock had been volatile even before the Globe story and that the Ontario Securities Commission declined to investigate Prof. MacIntosh's allegations.
The judge found that there was no compelling evidence that the sources had manipulated the stock prices when they spoke to The Globe in June, 2008.
"There may well be cases where the information provided by the confidential financial sources is in contravention of securities law and a claimed journalist-source privilege will be trumped by a greater public interest. … This is not that case," Judge Belobaba wrote.
A lawyer for Prof. MacIntosh said they were reviewing the ruling to decide whether to appeal.
The decision is important because it "emphasizes the court's recognition of the importance of confidential sources to the media's ability to inform the public on matters in the public interest," Globe lawyer Peter Jacobsen said.