A woman who made $40,000 on her first-ever stock deal did so with the inside knowledge that the company was about to be bought out, the BC Securities Commission alleges.
The BCSC has determined that Amina Umutoni Weicker had engaged in illegal insider trading after she was tipped by her geologist husband, Robert Frederick Weicker, that the junior miner he worked for, Geo Minerals Ltd., was about to be acquired by New Gold Inc. (TSX:NGD).
Insider trading is illegal when the trading is done based on information provided by an insider and which is not yet publicly available.
According to the BCSC, Geo Minerals was approached in June 2011 by New Gold, which was interested in Geo Minerals’ properties, and in August, Robert Weicker, who was working for Geo Minerals as a geologist, was asked to write to New Gold to discuss the terms of a takeover.
Later that month, Amina Weicker opened an online trading account and between September 12, 2011 and October 11, 2011 bought shares in Geo Minerals, at between $0.10 and $0.11 per share.
On October 17, 2011, the acquisition was made public by press release. On December 17, 2011, Amina Weicker sold all her shares at $0.16 per share, netting $40,000.
A BCSC panel dismissed allegations that Robert Weicker had engaged in insider trading, but found that he had breached securities law regarding the disclosure of material facts by someone in a special relationship with an issuer.
The Weickers have been ordered to make submissions in response to the BCSC’s findings.
