A judge with the British Columbia Supreme Court disagrees with part of a ruling of the B.C. Securities Commission concerning a case against promoter Murray Pezim and two associates over insider-trading allegations.
Justice Douglas Hogarth, in a written decision dealing with the payment of legal costs as they pertain to the commission hearing, interpreted the “Chinese Wall” defence presented during the hearing differently from the commission. Pezim, John Ivany and Lawrence Page were found guilty by the commission of failing to disclose drill information to the public.
The commission, in announcing its ruling late last year, banned the trio from trading on the Vancouver Stock Exchange for one year and ordered the three to pay a major portion of the costs of the hearing. The three have appealed the decision to the British Columbia Court of Appeal.
The case revolves around drill results from the Eskay Creek gold play in northwestern British Columbia and involves two companies, Prime Resources Group (VSE) and Calpine Resources, with which the three men were related.
Lawyers for the trio argued a “Chinese Wall” arrangement existed. This arrangement allowed the men to undertake transactions, such as raising funds, without them being told of drill-hole results that had not yet released to the public, which would be considered insider-trading information. Other members of the Prime staff were said to be looking after the assays.
The commission rejected the defence. However, the judge argued the Chinese Wall is a practice used by other corporations and has received regulatory acceptance in Ontario.
The judge’s comments formed part of a ruling in favor of a Prime application seeking permission to pay the legal costs incurred by the three men because of the commission hearing.
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