The Ontario Securities Commission (OSC) has frozen accounts at BMO Investorline held in the name of John Cameron Fraleigh as part of a routine investigation into trading in shares of
The commission said it planned to ask the Ontario Court to continue the asset freeze by Nov. 14.
The move comes just days after David Wilson officially assumed the role of chairman of the provincial market regulator, vowing to make law enforcement one of the top priorities during his five years at the helm.
It also follows on the heels of a similar but unrelated investigation by the U.S. Securities Exchange Commission (SEC), which is looking into whether unknown insiders had confidential information when they bought more than 10,000 Placer call options on Oct. 25 and 26. The options were set to expire in two weeks and represented a US$1.9 million profit. Barrick launched its US$20.50 cash-and-share bid — which, if successful, would beget the world’s largest gold producer — on Oct. 31. Placer’s shares quickly jumped around 20% following the offer.
At the request of the SEC, a federal judge in New York has frozen US$3 million in assets and ordered the unknown buyers of more than 10,000 Placer call options to identify themselves. The SEC is also looking for the court to impose civil penalties and issue an order restraining the buyers from further violations of U.S. fraud laws.
The securities were purchased through Geneva-based Banque SCS Alliance SA.
Meanwhile, Placer has set up a special committee of independent directors to evaluate Barrick’s takeover offer. The company’s chairman, Robert Franklin, will head the committee, which includes Donald Carty, John Crow, Graham Farquharson, Vernon Taylor and William Wilson.
Financial advisors CIBC World Markets and Morgan Stanley & Co. will back the committee; Canadian legal counsel Osler, Hoskin & Harcourt and Simpson, Thacher & Bartlett in the U.S will further bolster it.
The special committee will also examine the company’s alternatives and make recommendations to the board.
“Once formal offer documents are received, the board will be in a position to give Barrick’s proposal further consideration and, in due course, communicate its views to shareholders,” said Franklin in a press release.
Placer also says it will inform Barrick of the fact that more than 40% of its outstanding shares are held by U.S. investors. That means, Placer believes, that Barrick would not qualify for filing documents relating to the offer with the SEC on Form F-8, as Barrick plans.
Placer says that any exchange offer by Barrick will be subject to the U.S. exchange offer rules, and subject to review by the SEC.
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