The Ontario Securities Commission (OSC) said Thursday that it has settled a small insider trading case.

The OSC has approved a settlement agreement with Matthew Schloen concerning allegations that he improperly traded on inside information about the possible takeover of software firm, Bridgewater Systems Corp.

According to the settlement, the undisclosed information was provided inadvertently by an employee of Bridgewater whom Schloen should have known “was a person in a special relationship with Bridgewater”.

The firm was ultimately acquired by Amdocs Ltd., and he made a $23,000 profit by trading on the information that it was a takeover target. “By purchasing shares in Bridgewater while in possession of the undisclosed information, which was a material fact, Schloen engaged in insider trading,” the settlement notes.

In his defence, the agreement also says that Schloen did not consider whether the rumours within Bridgewater constituted inside information, and did not consider that trading on that information would violate securities laws, but he now accepts responsibility and understands that the trading does breach the law.

He agreed to disgorge his trading profit, pay a $5,000 penalty and costs of $5,000. He is also banned from trading for three years.