The Ontario Securities Commission (OSC) plans to hold a hearing on May 4 into allegations that portfolio manager Ben Cheng tipped a colleague to plans for a major acquisition by online gambling firm Amaya Inc. before the deal was announced, and that a couple of the people who received the news then traded on it.

The OSC announced the allegations on Wednesday against Cheng, co-chief investment officer at Toronto’s Aston Hill Asset Management Inc. (AHAM); John David Rothstein, senior vice president and national sales manager at AHAM; Eric Tremblay, CEO of the fund manager’s parent company, Aston Hill Financial Inc.; and Frank Soave, an advisor at CIBC Wood Gundy. None of the allegations have been proven.

“This case is about illegal insider tipping and trading, misleading statements made to staff investigators, and breaches of confidentiality, involving some senior market participants,” the OSC says in a statement.

According to the OSC’s allegations, Cheng learned about Amaya’s planned acquisition of the firm that operated PokerStars and Full Tilt Poker in a US$4-billion deal, along with a planned financing to fund the deal, in April 2014. The information was disclosed in a meeting in which Aston Hill was invited to participate in the transaction and was subject to a non-disclosure agreement.

Then, in June 2014, Cheng passed along some of that information to Rothstein and suggested that Rothstein should share the information with clients who may have lost money on investments promoted by the firm, the OSC alleges.

“Rothstein understood that the purpose of providing them with the material, undisclosed information was to make up for these losses,” the OSC’s statement says.

The OSC also alleges that Rothstein then tipped Soave and that they both traded on that information. The regulator states that Soave made a trading profit of $38,166 on Amaya shares and Rothstein generated a $5,507 trading profit.

In addition, the OSC alleges that Cheng, Soave and Tremblay “made misleading statements” to regulator’s staff during its investigation; that Cheng disclosed the contents of a confidential examination by OSC staff that “provided witnesses interviewed by staff with an opportunity to tailor their evidence to his”; and that he instructed Rothstein to tell the regulator that he traded in Amaya based on market rumours and not due to inside information.

The OSC has set a hearing for May 4 to consider the allegations against Cheng, Tremblay and Soave, but plans to hold a settlement hearing with Rothstein on April 18. The details of a settlement will only be revealed if the OSC approves the deal after a hearing.

In September 2016, Aston Hill announced that Cheng was taking a leave of absence.

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