A former Canadian investment banker who consulted the C$172.6 billion (US$168.8 billion) Canada Pension Plan Investment Board, Toronto, on investment ideas will pay $340,000 to the SEC to settle charges that he used that information for insider trading.
Richard Bruce Moore, who worked at the Canadian Imperial Bank of Commerce, purchased securities in U.K.-based engineering and manufacturing company Tomkins PLC in 2010 after he learned that the CPPIB would acquire the firm, according to the SEC complaint filed in U.S. District Court in New York.
Mr. Moore misappropriated the information by purchasing Tomkins American depository receipts during the weeks leading up to the acquisition. After the acquisition offer was announced, the closing price of Tomkins ADRs rose 27%, and Mr. Moore made more than $163,000 in illicit profits, the SEC said.
The Ontario Securities Commission also has a related action pending against Mr. Moore for insider trading in Tomkins common stock.
Mr. Moore “spent approximately one-third of his total net worth on purchases of Tomkins securities based on information he learned in the course of his employment,” said Scott W. Friestad, associate director of the SEC's enforcement division, in a statement.
According to the SEC's complaint, Mr. Moore's primary contact was a CPPIB managing director who was responsible for taking public companies private. Through the contact, Mr. Moore learned that the board was working on a large transaction in the U.K. and then pieced together non-public information to conclude that the target was Tomkins. The CPPIB and Onex Corp. announced the acquisition offer for Tomkins on July 19, 2010.
The SEC settlement is subject to court approval. In it, Mr. Moore agreed to an SEC order that will bar him from the securities industry or participating in a penny stock offering.
“CPPIB is not commenting on this issue, as the focus of the SEC and OSC's actions is not the activities undertaken by CPPIB and Onex in their joint acquisition of Tomkins,” Linda Sims, CPPIB spokeswoman, said in an e-mail.
Kevin Dove, spokesman at CIBC, could be reached for comment.