Fairfax Financial Holdings (TSX:FFH) has confirmed that the company and two senior executives are under investigation by Quebec’s securities regulator for alleged insider trading involving wood fibre producer Fibrek.
The Toronto-based insurance company and investment manager said the investigation, which includes Fairfax CEO Prem Watsa and company president Paul Rivett, is in connection with the takeover of Fibrek by Resolute Forest Products in 2012.
Fairfax says it has an “unblemished record for honesty and integrity” and is fully co-operating with the investigation by Quebec’s Autorite des marches financiers, which didn’t involve any trading by individuals.
“Fairfax continues to be confident that in connection with the Resolute takeover offer, it had no material non-public information, that it did not engage in illegal insider trading or tipping,” it said in its first-quarter report.
Fairfax had previously disclosed that it was the subject of such a probe, but had not identified the transaction involved.
Resolute’s (TSX:RFP) Dec. 31, 2011, takeover offer was made to all Fibrek shareholders, including Fairfax.
Fairfax agreed to tender its 26 per cent stake in Fibrek at the same price as other Fibrek shareholders.
Fibrek vigorously opposed the takeover offer.
The AMF and a Quebec court reviewed the takeover offer, including Fibrek’s tactics to block the transaction and lock-up agreements given to selling shareholders.
The regulator and Resolute couldn’t be immediately reached for comment.