Law Firms

Suspect in Insider Trading Probe Had 'Connection' to Lawyer

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Canadian and U.S. securities regulators are investigating possible insider trading in a probe focused on 11 Canadian takeovers during the past two years and a Minneapolis-based law firm that advised companies involved in each deal, a Canadian newspaper says.

According to Ontario Superior Court documents, the Ontario Securities Commission is investigating three relatives who allegedly earned $1.1 million by trading in securities of resource companies shortly before they became takeover targets and their stock prices shot up. An affidavit filed by an OSC investigator says there was “a connection” between one of the three relatives and an unnamed lawyer at an unidentified law firm that represented a company in each of the transactions, reports the Globe and Mail.

“Corporate announcements of each of the deals show that only one law firm, Dorsey & Whitney LLP, acted as an adviser during each transaction. Dorsey & Whitney was founded in Minneapolis in 1912 and currently employs 650 lawyers in the United States, Europe and Canada,” the newspaper writes.

A law firm partner at the Minneapolis office declined to comment, the Globe and Mail says.

The U.S. Securities and Exchange Commission is also involved in the investigation. It is apparently the first time that lawyers have been publicly targeted in an insider trading investigation in Canada, according to the newspaper.

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