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Kim Goodman, left, walks with Mitchell Finkelstein, alleged insider-trading tipping lawyer, in the hall way of the Ontario Securities Commission during his trial, Nov. 10, 2011.

‎It is "indisputable" that a former elite Bay Street lawyer fed tips about six impending corporate deals to an old fraternity friend, staff for the Ontario Securities Commission alleged on Friday as the regulator wrapped up its case against Mitchell Finkelstein and a group of investment advisers facing insider trading allegations.

‎The OSC's high-profile allegations against Mr. Finkelstein, a former senior partner with top law firm Davies Ward Phillips & Vineberg LLP, rest on a pattern of evidence that he accessed his firm's confidential files on corporate deals and then spoke by phone with his old friend, former CIBC investment adviser Paul Azeff, who allegedly either passed the tips to others or executed trades for himself or his clients, friends or family. In some cases, large trades in an impending takeover target occurred within minutes.

"What's improbable here?" OSC lawyer Donna Campbell asked the three-member commission panel hearing the case in her closing arguments. "What's improbable is that lightning struck six times. That's what's improbable."

But the defence, and the chairman of the panel, OSC commissioner Alan Lenczner, raised some issues with the case summarized by Ms. Campbell on Friday. Mr. Lenczner said the panel wanted to know more about the OSC's allegations that Mr. Finkelstein made large cash deposits at various banks after meetings with Mr. Azeff.

The OSC did not provide any evidence the cash actually came from Mr. Azeff. And during the hearing, the regulator's lawyers failed to challenge denials from Mr. Azeff and Mr. Finkelstein that the cash deposits were innocent. Mr. Finkelstein testified previously at the hearing that he often kept up to $35,000 cash around his house in metal tins.

Ms. Campbell said the cash deposits were part of the overall pattern that the OSC's staff allege supports their contention that Mr. Finkelstein engaged in illegal tipping.

"There is contact and there is deposit of the money," Ms. Campbell said, noting that in 2006, a year staff do not allege Mr. Finkelstein tipped his friend on any deals, there were no large cash deposits. "There is a pattern."

‎Gordon Capern, a lawyer for Mr. Finkelstein, is scheduled to make closing arguments on Monday, but his written submission submitted this week also zeroes in on the ca‎sh issue, arguing that it is a "centrepiece" of the OSC case. Without it, Mr. Finkelstein had "no motive to tip Paul" since the lawyer's career was "on the ascendancy" at Davies, one of Bay Street's most prestigious firms.

Questioned on this point by Mr. Lenczner, Ms. Campbell said the OSC does not need to prove a motive for Mr. Finkelstein: "There does not need to be a motive ... People do strange things all the time."

In closing arguments on Friday, a lawyer for Mr. Azeff and for Korin Bobrow, who is another former CIBC adviser facing allegations, told the panel that the OSC had "tunnel vision" in its investigation and that its "pattern" is selective and based on "a very artificial and narrow window."

Lawyer Tyler Hodgson said the OSC failed to look at his clients' "historic trading patterns," saying that the OSC selected just six companies out of the thousands that his clients' traded. Mr. Hodgson also said the OSC's investigator had no "industry experience" and pointed to an internal CIBC investigation that he said found no unusual trading patterns.

Mr. Hodgson also highlighted evidence that Mr. Bobrow and others alleged to have traded on inside information actually sold shares in one company that they had allegedly been told was the target of a takeover, instead of buying on the assumption the stock price would spike when the deal is announced publicly.

"Do you know what people with inside information don't do?" Mr. Hodgson asked the panel. "They don't trade contrary to that information."

In her closing submission, Janice Wright, a lawyer for former ‎TD Waterhouse adviser Francis Cheng – who faces allegations he traded on inside information received through a colleague, Howard Jeffrey Miller, that the OSC traces back to Mr. Finkelstein – said the panel cannot conclude her client knew the tip was from an insider, since he was so far removed from the alleged tip.

"Mr. Cheng is the most outside 'insider' ever brought before the commission," Ms. Wright told the hearing.

Follow Jeff Gray on Twitter: @jeffreybgrayOpens in a new window

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