The Ontario Securities Commission has added two more deals to its case against a high-profile mergers and acquisitions lawyer accused of tipping friends about pending acquisitions.
The OSC alleges Bay Street lawyer Mitchell Finkelstein co-operated with Paul Azeff and Korin Bobrow while they worked at CIBC World Markets Inc. to “engage in an illegal insider tipping and trading scheme over the course of a three-year period from November 2004 to August 2007.”
Finkelstein was working at Davies Ward Phillips & Vineberg LLP in Toronto at the time. He left the firm the day after the OSC made its original allegations in November 2010, which included the original four pending takeover bids on which he allegedly shared information before they became public.
In its statement yesterday, the OSC added to the allegations two more cases: Cadbridge and InnVest REIT joint negotiated takeover bid of Legacy Hotels REIT announced July 12, 2007 and Behringer Harvard’s acquisition of IPC US announced August 14, 2007.
Finkelstein and Azeff were apparently good friends after meeting and becoming fraternity brothers at the University of Western Ontario, remaining in regular contact, the OSC says in it statement. Bobrow and Azeff met in high school and were business partners in the same CIBC office. They no longer work with the investment bank.
“Throughout the relevant period, Azeff obtained material information related to the pending acquisitions from Finkelstein prior to the information having been generally disclosed,” the OSC report notes. “Azeff knew or ought to have known that Finkelstein obtained the information in his capacity as a lawyer and that Finkelstein stood in a special relationship to each of the reporting issuers.”
The OSC says that by informing other persons of materials facts with respect to one or more reporting issuers, prior to that information being generally disclosed, Finkelstein, Azeff and Bobrow engaged in tipping, contrary to Ontario securities laws, and engaged in conduct contrary to the public interest.