Proceedings


PDF Version
PDF Version

 

IN THE MATTER OF THE SECURITIES ACT

R.S.O. 1990, c.S.5, AS AMENDED


AND


IN THE MATTER OF DANIEL DUIC



STATEMENT OF ALLEGATIONS

Staff of the Ontario Securities Commission ("Staff") make the following allegations:

1. Daniel Duic is an individual resident of Toronto, Ontario.

2. Andrew Rankin was the Managing Director in the Mergers and Acquisitions Department of RBC Dominion Securities from early 1999 to mid-2001. In his former position at RBC DS, Rankin was privy to and possessed confidential material information about pending mergers and acquisition transactions of various reporting issuers in Ontario. On April 4, 2001, RBC DS announced an investigation of certain suspicious trading activities. As a result of this investigation, on April 23, 2001 the firm announced that it had suspended Rankin without pay. On June 15, 2001, RBC DS terminated the employment of Rankin.

3. Duic is a close friend of Rankin and has been close friends with him for some twenty years.

4. Between October, 1999 and March 2001, Rankin told Duic confidential information concerning material facts or material changes of Ontario reporting issuers not generally disclosed that Rankin had learned as a result of his fiduciary position at RBC DS. The material fact or change related to a pending merger and acquisition transaction about certain reporting issuers. Rankin had knowledge of these transactions in advance of their being publicly announced in that RBC DS was acting as an advisor to one of the parties or proposed parties in each of the merger or acquisition transactions.

5. Based upon the confidential information divulged by Rankin and during this period, Duic bought securities of reporting issuers in Ontario in advance of the public announcement of their respective merger and acquisition transactions. In particular, Duic bought securities of Canadian Pacific Limited and Moffat Communications Limited, among others.

6. At the time Duic purchased the securities, the confidential information concerning the material fact or material change had not been generally disclosed to the public.

7. For each of the merger and acquisition transactions, RBC DS and Rankin possessed confidential information concerning material facts or material changes of reporting issuers in that the Mergers and Acquisitions Department of RBC DS was the advisor to one of the parties, or to one of the proposed parties in the merger and acquisition transaction. For each company, the material fact or material change was the pending merger and acquisition transaction.

8. Particulars of the securities which Duic purchased in Canadian Pacific and Moffat Communications (hereinafter collectively defined as "the Companies") are as follows:

Canadian Pacific Limited

November 9, 2000
November 14, 2000
November 14, 2000
November 14, 2000
December 15, 2000
December 15, 2000
December 15, 2000
December 19, 2000
January 29, 2001
January 29, 2001
2,000 shares at $43.850
3,000 shares at $43.150
3,100 shares at $43.200
3,900 shares at $43.200
500 shares at $43.100
4,600 shares at $43.050
900 shares at $43.100
10,000 shares at $42.000
100 shares at $42.900
200 shares at $42.900


Canadian Pacific Limited (call options - Feb 42.5)

January 11, 2001
January 12, 2001
January 19, 2001
January 19, 2001
January 19, 2001
January 22, 2001
50 contracts at $1.980
95 contracts at $1.936
80 contracts at $1.350
20 contracts at $1.350
220 contracts at $1.354
100 contracts at $2.140


Canadian Pacific Limited (call options - Feb 45)

January 19, 2001
January 19, 2001
January 19, 2001
January 19, 2001
20 contracts at $0.650
20 contracts at $0.550
40 contracts at $0.600
20 contracts at $0.600


Canadian Pacific Limited (call options - Mar 42.5)

January 24, 2001 400 contracts at $2.695


Canadian Pacific Limited (call options - Apr 45)

January 11, 2001
January 12, 2001
25 contracts at $2.000
95 contracts at $2.000


Moffat Communications Limited

November 13, 2000
November 24, 2000
November 24, 2000
November 30, 2000
December 4, 2000
15,000 shares at $27.6083
9,000 shares at $29.5667
7,400 shares at $29.2990
9,750 shares at $29.9505
250 shares at $28.5000


9. After the public announcement, the value of the securities of the Companies increased in value. Immediately thereafter, Duic sold some of the securities of the Companies to realize a profit of $1,292,023 and an unrealized gain of $600,075 for the remaining securities which he held.

10. Duic, for the most part, traded the securities using a pseudonym and through off-shore accounts in a number of jurisdictions.

11. At the time that Rankin told Duic of the material facts or material changes, he was the Managing Director of the Mergers and Acquisitions Department of RBC DS. As such, Rankin was a person in a special relationship for each of the Companies as defined in s. 76(5)(b) of the Securities Act.

12. In that Duic then possessed the material facts or material changes not generally disclosed to the public, Duic was also in a special relationship with each of the Companies at the material time as defined in s. 76(5)(e) of the Act.

13. Duic, as a person in a special relationship with each of the Companies, sold securities of each of the Companies with knowledge of a material fact or a material change that had not been generally disclosed. Accordingly, Duic breached s. 76(1) of the Act.

14. Such additional allegations as Staff may submit and the Commission may permit.