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Canadians among top corporate whistleblowers in U.S. program

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Fairfax to control Keg
Fairfax Financial Holdings Ltd. is grabbing a controlling stake in the Keg restaurant group.

Fairfax, which most recently led a group of investors in BlackBerry Ltd. debt, is buying 51 per cent of Keg Restaurants Ltd., which pays royalties to The Keg Royalties Income Fund, a publicly traded group.

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Fairfax is buying the interest from David Aisenstat, who controls Keg Restaurants and will continue to lead its operations while owning 49 per cent.

The Keg Royalties Income Fund, which includes more than 100 outlets and annual sales of some $500-million, gets royalties to the tune of 4 per cent of gross sales of the Keg restaurants in the pool, both corporate and franchised.

"Fairfax is a well-known and proven investor in the Canadian market," said fund chairman Kip Woodward.

"With the addition of Fairfax to the Keg team, The Keg is well positioned and has a solid foundation for continued growth, which will benefit the fund and its unitholders."

Fairfax recently sold Prime Restaurants Inc. to Cara Operations, which runs Harvey's and Swiss Chalet, but was reported to have maintained a stake in the merged company.

Terms of the deal weren't disclosed.

Fairfax is just coming off a proposed, but ultimately failed, takeover bid for BlackBerry. It had struck a tentative $4.7-billion (U.S.) deal to a consortium that would buy the ailing smartphone manufacturer but that fell through.

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Instead, BlackBerry raised $1-billion via a sale of convertible debentures. Fairfax holds just shy of 10 per cent of the smartphone maker, which would surge far higher under that conversion.

Canadians among top whistleblowers
Canadians are doing their fair share when it comes to blowing the whistle on corporate malfeasance in the United States.

Tips from Canada under the Dodd-Frank Whistleblower Program rose to 62 during the Securities and Exchange Commission's 2013 fiscal year, compared to 66 from Britain, which topped the list of foreigners, and 52 from China, which ranked No. 3.

For Canada, that marked an increase from 46 in 2012 and just 1 in 2011, compared to 74 and 9 for Britain and 27 and 10 for China in the same periods.

The program's annual report, which sports a silver whistle on the cover, doesn't say how many of those were successful.

Over the course of the year, the program handed out more than $14.8-million (U.S.) in awards, with one payment of about $14-million, its largest ever, accounting for the bulk of the money.

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"While the amounts paid are significant, the bigger story is the untold numbers of current and future investors who were shielded from harm thanks to the information and co-operation provided by whistleblowers," the agency's chief, Sean McKessy, said in the report.

The total number of tips to the program rose in 2013 to 3,238 from 3,001 a year earlier and 334 in 2011. California, New York and Florida led the way.

Those resulted in 118 enforcement judgments and orders, the SEC said.

Tips from Canada outpaced those from many individual states.

Fund buys snack company
Ontario's teachers would probably prefer their students snack on fresh fruit, but their pension fund is buying into some sugary snacks.

As The Globe and Mail's Bertrand Marotte reports, the Ontario Teachers' Pension Plan is buying Britain's Burton's Biscuit Co., which makes Wagon Wheels and Jammie Dodgers.

Terms of the deal weren't disclosed, but Burton's boast annual sales of £340-million.

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