Insider trading involves the use of non-public information about a public company to make decisions about trading the company’s stock. This non-public information is generally obtained from a person or company who is in a special relationship with the public company, such as a director, officer, employee, or another insider.
For example, if an employee of a public company finds out that the company is going to announce poor quarterly results and decides to sell their stock in that company while that information is still non-public, they may be engaged in insider trading.
Insider trading rules can also apply when a person or company obtains non-public information from someone that they know, or ought to know, is in a special relationship with a public company. For example, if the employee of a public company tells a friend to sell their stock in that company before poor quarterly results are announced, the employee’s friend may also be engaged in insider trading.
The Office of the Whistleblower (OWB) runs the OSC’s Whistleblower Program. It accepts tips on possible violations of Ontario securities law and offers protections for individuals who come forward. It also may provide a reward of up to $5 million for tips that lead to enforcement action.
If you believe that you may have violated Ontario securities laws, we suggest you speak with legal counsel.
The Ontario Securities Act (OSA) is enforced by the Ontario Securities Commission (OSC). It governs the capital markets in Ontario, including insider trading (76).