An information technology manager at MacDonald Dettwiler and Associates Ltd. has agreed to pay penalties and costs totalling $95,000 to settle allegations of insider trading and tipping in advance of a 2012 takeover deal.
In a settlement deal with the Ontario Securities Commission, Satish Talawdekar admitted he used his personal line of credit to buy $44,365 worth of MDA stock in 2012, prior to the company's announcement that MDA was acquiring a major subsidiary of Loral Space & Communications Inc.
Mr. Talawdekar, an IT manager in MDA's Brampton, Ont., office, sold the shares shortly after the deal was revealed, earning a profit of $11,673 or a 26-per-cent return in seven days.
Mr. Talawdekar was not involved in the deal, but sat near a team of employees working on due diligence for the acquisition, the OSC said. The settlement agreement said Mr. Talawdekar "is very remorseful for his conduct" and is "unlikely to repeat this sort of conduct."
In an agreed statement of facts, Mr. Talawdekar also admitted he passed along news of the acquisition to long-time friend Anand Hariharan, who did not work at MDA. Mr. Hariharan made a profit of $68,683 (U.S.) by buying Loral option contracts in advance of the announcement, the OSC said.
Mr. Hariharan previously agreed to a settlement with the OSC, paying $40,000 after admitting he acted "contrary to the public interest."
Mr. Talawdekar agreed to "disgorge" his $11,673 profit, pay a penalty of $23,000 for his illegal trading and pay a further penalty of $55,326 for tipping his friend about the deal, which covers a "substantial portion of the profit made by Hariharan as a result of Talawdekar's misconduct."
He also agreed to pay $5,000 to cover the OSC's investigation costs.
Mr. Talawdekar is banned from trading securities for 10 years with certain exceptions and is prohibited for 10 years from working as a registrant in the financial industry.