gavel with $100-bill background

A hearing panel of the Ontario Securities Commission has approved a settlement with former Aston Hill Financial Inc. (AHF) executive Eric Tremblay for misleading OSC staff during an investigation of insider trading involving Amaya Gaming Group Inc., the OSC announced Friday.

According to the terms of the settlement, Tremblay will pay a $125,000 fine and costs of $10,000. He is also prohibited from acting as a director or officer for two years.

In the settlement, Tremblay admitted that he made misleading statements to OSC investigators who were looking into possible insider trading involving Amaya based on a tip passed along by Ben Cheng, a former Aston Hill Asset Management Inc. (AHAM) portfolio manager, and others.

Tremblay was chairman and CEO of AHF and the UDP of AHAM, a wholly owned subsidiary of AHF.

Cheng was accused of passing along inside information about Amaya to John David Rothstein, senior vice president and national sales manager, AHAM, who allegedly passed the information along to Frank Soave, a broker at CIBC Wood Gundy.

The OSC also alleged that Rothstein and Soave traded shares of Amaya with inside information on the company. Rothstein settled last year, agreeing to a two-year ban and to pay $11,000 as a monetary penalty and disgorgement.

Cheng settled in June, agreeing to a six-year ban and a $400,000 penalty.

The allegations against Soave have not been proven. His hearing is scheduled to start on Sept. 4, and is slated to continue through Oct. 12.

Tremblay denied that he knew anything about the alleged tipping activity “until he was confronted with evidence to the contrary,” the OSC stated in its amended statement of allegations.

Tremblay’s settlement agreement indicates that, in fact, the possible insider trading/tipping was discussed on a couple of occasions, including at a poolside cabana in the Dominican Republic and on the patio at Bymark, a restaurant in Toronto’s financial district.

In its oral reasons for approving Tremblays’s settlement, the hearing panel stated: “Tremblay’s conduct constituted a serious breach of Ontario securities law … such conduct hinders staff’s performance of their responsibilities to monitor and enforce compliance with Ontario securities law, and thus constitutes an obstacle to effective regulation of the capital markets. This is particularly true in circumstances where staff are investigating the misuse of insider information which, if proven, also constitutes a serious breach of the Act.”

The financial component of the settlement has already been paid, the panel noted.