Cormark and their client allegedly devised a complex series of transactions in 2017 that would profit — \u0027virtually risk\u002Dfree\u0027 — from an anticipated spike in…
In a statement of allegations released late Wednesday, Canada’s largest capital markets regulator accused Cormark, William Jeffrey Kennedy, who was the investment dealer’s head of equity capital markets, and client Marc Bistricer of a complex scheme involving Canopy Growth Corp. The regulator is not alleging any wrongdoing against the cannabis company.Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.
According to the events laid out by the OSC, Saline sold short shares of the cannabis company in the open market, bought an equal number of Canopy shares in the private placement, swapped the private placement shares for free-trading Canopy shares under a securities lending agreement, and used the free-trading shares to settle the short sales.
“Saline put up no money of its own. It used the short sale proceeds to pay for the private placement, the securities loan, and Cormark’s services, which cost $362,500,” according to the statement of allegations. “Saline’s profit was over $1.27 million.”Article content None of the allegations have been proven, and an initial hearing is to take place Nov. 23 by teleconference.
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