A joint settlement recommendation was approved by the Commission whereby it was agreed that between May 30, 2011 and June 15, 2011, the Respondent was made aware of rumours within Bridgewater Systems Corp. (“Bridgewater”) that constituted information of a material nature that was not generally disclosed and from which he deduced that Bridgewater was an imminent takeover bid. This information was inadvertently provided by an employee of Bridgewater whom the Respondent knew, or ought to reasonably have known, was in a special relationship with Bridgewater.
He purchased shares of Bridgewater based on the information and sold them immediately after its acquisition became public.
He had never purchased shares of Bridgewater before. He had never been a registrant. He did not consider whether the rumours within Bridgewater constituted information of a material fact or change which was not generally disclosed, nor did he consider whether his transactions would be a breach of securities law.
He believed the undisclosed information was likely to be true, and did his own research on Bridgewater, using publically available information.
He was required to disgorge his profits of $23,000.00 and pay fines and costs of $5,000.00 each. A 3 year suspension on trading was imposed.