Indian-Canadian couple accused of insider trading
Suman and his wife has been accused by Canadian market regulator of making nearly $1 million through illegal insider trading.world Updated: Jul 26, 2007 13:41 IST
An Indian Canadian couple has been accused by Canadian market regulator of making nearly $1 million through illegal insider trading.
The Ontario Securities Commission (OSC) has alleged that Shane Bashir Suman, who worked as an IT employee, had access to secret internal emails about a pending takeover involving his company, MDS Sciex, a Mississauga-based life sciences company.
The commission filed insider-trading charges against Suman and his wife on Wednesday, reported the online edition of The Star newspaper.
MDS said January this year that it would buy Molecular Devices Corp (MDCC), a California firm that makes bio-analytical measurement systems.
Regulators said that Suman shared the information with his wife Monie Rahman, who was living in Logan, Utah during that time.
The couple then bought shares and options in Molecular, according to a statement of allegations released by the OSC Wednesday.
In the weeks before the takeover announcement, MDS and Molecular executives used the subject line "Monument" in the emails they exchanged.
The material was confidential, but Suman, responsible for Sciex's spam filter, could see the queue of emails in the system, including those sent from Molecular with the word "Monument" in the subject line.
On Jan 23, Sciex's communications officer asked Suman to help find a document after her computer crashed.
"Suman was provided with the electronic file name and monument message and told that it was urgent the file be recovered. He was told that it was so sensitive that he could not view the document once it was recovered," according to OSC.
Shares of MDCC traded at $23.88 on January 26. The deal was announced on January 29. The stock closed that day at $35.07 per share.
Suman and Rahman used an e-trade account to purchase 12,000 shares of MDCC and 900 options contracts just days ahead of the announcement, according to the OSC.
According to the regulator, in the days before the tender offer became publicly known, Suman and Rahman made just over $1 million by trading in the securities of Molecular.
The OSC will conduct its first hearing in the case August 28.