Gillian Dingle Says Ontario Court of Appeal Decision Clarifies Law on Tipping Chains

Partner Gillian Dingle has given her view on the Ontario Court of Appeal’s ruling in Finklestein v. Ontario Securities Commission, telling Law Times it provides clarity surrounding the law on tipping and tipping chains.

Insider trading allegations usually result in a number of people receiving the leaked information in question, leaving behind a chain of tippees. The decision in Finklestein was groundbreaking as, for the first time, the Ontario Court of Appeal interpreted the definition of “person in a special relationship” with an issuer.

An excerpt of the story is below.

In Finkelstein v. Ontario Securities Commission, the Court of Appeal upheld an OSC panel’s finding that Man Kin Cheng, a former investment adviser at TD Securities Inc., and Howard Miller were part of a five-person tipping chain that received insider information that originated from Mitchell Finkelstein, a former partner with Davies Ward Phillips & Vineberg LLP.

The Court of Appeal found that Cheng and Miller ought to have known that their tipper was in a special relationship with the issuer and that the material they received was, therefore, inside information.

Gillian Dingle spoke with Law Times about the case and said the ruling “clarifies the law on tipping and tipping chains in insider trading cases.”

“This decision reinforces the ability of the OSC to rely on a reasonable inference drawn from fact,” Gillian said.

Torys released the bulletin “Insider Trading and Tipping: Ontario Court of Appeal helps Set Limits” in January which discusses the ruling.

Comments from this bulletin were also picked up by the Financial Post.

You can learn more about Torys’ Litigation and Dispute Resolution Practice by heading to the practice page.