Securities regulator alleges that former geologist tipped his wife and they engaged in insider trading
VANCOUVER, July 31, 2013 /CNW/ - The executive director of the British Columbia Securities Commission has issued a notice of hearing alleging that a former consulting geologist tipped his wife and they engaged in insider trading.
The notice alleges that while Robert Frederick Weicker was in a special relationship with Geo Minerals Ltd. (he had signed a contract to be the consulting geologist in October 2010), he informed his wife, Amina Umutoni Weicker, of material information that had not been generally disclosed regarding the acquisition of that company. BCSC staff contends that Amina then used this information to purchase securities of Geo Minerals.
Geo Minerals was a junior mining mineral exploration company headquartered in Vancouver with a listing on the TSX Venture Exchange (TSX-V). Both Robert and Amina Weicker are residents of Port Coquitlam, B.C.
The notice states that in June 2011, New Gold Inc., a Toronto-based company listed on the Toronto Stock Exchange (TSX), contacted Geo Minerals to express its interest in acquiring one of Geo Mineral's properties. On July 28, 2011, Robert and representatives from New Gold and Geo Minerals met to discuss the potential deal. Throughout August and early September, Robert was involved with the negotiations between Geo Minerals and New Gold, which progressed from a single property deal to a company buy-out.
On Friday, September 9, 2011, Robert received an e-mail message from the Geo Minerals CEO stating that New Gold's board would likely approve a $0.15 bid. On Monday, September 12, Amina transferred $60,500 into her self-directed, on-line trading account from joint accounts controlled by the Weickers. Amina began trading Geo Minerals shares through her trading account, purchasing a total of 585,900 shares on September 12 and 13.
On September 16, New Gold provided Geo Minerals with a non-binding expression of interest to acquire all of Geo Minerals. That day, the Geo Minerals CEO emailed Robert: "We have something in writing. The eagle is landing!!".
On September 21 and October 11, Amina transferred a further $37,900 into her trading account. In total, between September 12 and October 11, Amina purchased 729,945 Geo Minerals shares at an average cost of $0.105 cents per share. The Geo Minerals shares were the only securities purchased or sold in Amina's trading account during this period.
On October 17, New Gold and Geo Minerals publicly announced that they had entered into an agreement, whereby New Gold would acquire 100% of the outstanding common shares of Geo Minerals. Following the announcement, the price of Geo Minerals shares increased 33% from $0.12 to $0.16.
On December 7, Amina liquidated her position in Geo Minerals shares for proceeds of $116,781.21 ($0.16 cents per share), representing a profit of $40,132.67. Then, on December 16, Amina deposited the funds from the trading account into one of the Weicker's joint accounts
BCSC staff alleges that both Robert and Amina Weicker breached securities laws by using material information that had not been generally disclosed to purchase and trade securities.
The notice also references Robert's prior misconduct and disciplinary history, including a settlement agreement with the BCSC for issuing misleading news releases that failed to disclose material facts, and a guilty plea in provincial court to tax evasion.
These allegations have not been proven. Counsel for the executive director will apply to set dates for a hearing into the allegations before a panel of commissioners on September 17, 2013 at 9:00am.
The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the notice of hearing on our website www.bcsc.bc.ca by typing Robert Frederick Weicker, Amina Umutoni Weicker or 2013 BCSECCOM 74 in the search box. Information regarding disciplinary proceedings can be found in the Enforcement section of the BCSC website.
Please visit the Canadian Securities Administrators' Disciplined Persons List for information relating to persons disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA).
Learn how to protect yourself and become a more informed investor at www.investright.org.
SOURCE British Columbia Securities Commission