Stock-tipping case leads to stiff penalties from OSC

A former executive assistant at a Toronto securities firm who illegally tipped friends and family to buy mining company shares has been ordered to pay fines and costs totaling $650,000.

The Ontario Securities Commission issued its reasons and decisions in the case of Eda Marie Agueci on Wednesday, after a long investigation that is estimated to have cost $2.7 million.

In all, the OSC alleged Agueci gave inside tips to eight individuals including friends and relatives, but there was no finding of insider trading against five of them. First filed in 2012, the case has dragged on and resulted in 59 days of hearings.

In a written decision, the threemember panel led by Edward Kerwin acknowledged that there is no evidence that Agueci profited from her misconduct and trading, and the proceeding has had an impact on her livelihood in the securities industry.

Three others were also found guilty of violating securities law including Dennis Wing, a founding member of First Marathon Securities, and his company Pollen; Henry Fiorillo; and Kimberley Stephany.

All four also face restrictions on acting as a director or officer and trading in securities. Both Agueci and Wing were also accused of trying to mislead OSC staff during the investigation. Agueci is ordered to pay a penalty of $350,000 and costs of $300,000.

Wing and Pollen have been ordered to pay back $520,916 earned from trading on Agueci’s tips as well as $1.75 million in administrative penalties.

Wing also must pay costs of $300,000. Fiorillo, a longtime friend of Agueci, was ordered to pay back $175,138 earned from specific trades and an administrative penalty of $350,000.

He also must pay costs of $50,000.

Go bulls go!

Go bulls go!
The chase by Frances Horodelski:

Are we there yet? Are we there yet? According to Angela Merkel and as reported by Reuters, “we’re not yet where we need to be” and “hours of the most intensive deliberations lie ahead of us.” It seems to now be down to the fine print with a final deal breakthrough anticipated in the next 48 hours and end-of week sign-off. The calendar remains tight because the Greek Parliament has to approve the plan by the end of the month – not a slam-dunk. So pockets of risk exist – but markets are taking it as a done deal. Around the world it is green with the Nikkei at a 15 year high (what do they care about Greece if the pension program in the country is looking to sell bonds and buy stocks). China opened after a holiday to the upside on PMI data (see below). European markets are green, green and green. Peripheral bonds are bid higher and U.S. futures are benefitting too. The U.S. dollar is up and the euro is down. Oil is a touch lower and gold is down about $5 and last week’s $20+ rally all but gone.

On the economic front today, the early look at June manufacturing globally has been benign to good. China showing some stabilization with the PMI slightly better than May and estimates (although still below 50), the Eurozone picked up steam with some numbers across the region and for Germany while France resumed its expansion (with a number above 50 for the first time since April 2014. We have economic data points in the U.S. that could be market moving such as durable goods and new home sales.

On an entirely different note, according to weather watchers, the warming patterns of the Pacific Ocean suggest an El Nino similar to the record pattern of 1997. The National Oceanic and Atmospheric Association wrote extensively on the weather post that last El Nino. What happened? The first two months of 1998 were the warmest in 2014 years. The entire winter was the second warmest on record and the seventh wettest. California and North Dakota had their wettest February on record. Florida, Maryland, Nevada, Rhode Island and Virginia had the second wettest February since 1895 and the warmest February on record occurred in the upper Midwest and parts of the east (including states that bordered Canada). Energy savings were estimated at 10% on lower heating costs. The summer of 1997 however, whether El Nino or not, wasn’t particularly kind to California with extensive flooding, mudslides and more than $1.1 billion in damage.

What’s on the agenda today – BlackBerry, Greece, economic momentum, and Canadian housing (we’ll be speaking to the Chief Operating Officer of Mattamy Homes, Canada’s largest new home builder. We’ll also look at numbers from Darden Restaurants which came in better than expectations and boosted its 2016 outlook. The company is also pursuing a REIT structure for its real estate that will trade as a separate company. What is it with the real estate world? How many new REITs have been and will be created? Is it so easy to do? The valuation boost can be massive but what are the risks? DRI’s shares are up 6.7% after rising 7% this month.

BlackBerry’s results came in a touch light on revenue and handset sales. But the big number was software which rose 150% year over year to $137 million substantially above street estimates and now represents (with licensing) 21% of the company’s revenue. Ebitda was a positive $157 million +5% while the company’s cash position rose to $3.32 billion and free cash flow was reported at $123 million. The stock is rallying in the pre-market on the software beat.

If you want to be bullish (and traders seem to be in still low volume), David Rosenberg from Gluskin Sheff has some reasons for you. First, the market bends, but doesn’t break. Even after more than 1350 days without a 10% correction. He notes that while long it isn’t the longest in history (2500 between 1990-1997 and 1600 days from 2003 to 2007). Second, by the time the Fed tightens, we are typically one-third of the way through a market cycle. They haven’t begun to tighten and it isn’t even a slam-dunk for September. Third, market leadership is pro-cyclical. Four, sentiment remains poor which is a contrary positive. And five, there has never been a market bear without a recession and that appears highly unlikely. So go bulls, go.

Bye-bye