The Ontario Securities Commission (OSC) is investigating 2 GlobeNewswire employees for suspicion of insider trading. The two Canadian programmers worked for Intrado Corporation, the company that owns GlobeNewswire.
Dave Pleiss, Intrado’s Vice-President said, "As a more general matter, we can confirm that Intrado co-operates with law enforcement and regulatory agencies any time that co-operation is requested."
The investigation dates back to 2020 on a tip that an Intrado employee, John Lester Mandac Natividad sold stocks of 10 US companies that were releasing information on their financial operations.
The OSC issued a search warrant for Natividad's residence. The investigators discovered WhatsApp messages between Natividad and Harpreet Saini, the second Canadian programmer, discussing stocks of companies that were scheduled to release financial news via GlobeNewswire.
The investigators seized Saini's trading records.
Anthony Long, a Senior Forensic Accountant at Ontario Securities Commission said that in 250 occasions trades were executed in a company when a press release was due on GlobeNewswire (on the same day or before).
Between 2018 and 2021, Saini earned $1.1 million from trading. However, it is yet to be determined how many trades are suspected to be a result of insider trading.
GlobeNewswire Mechanism for Insider Trading
The newswire company records all employees that view press releases that are yet to be published. The electronic tracking is designed to prevent misuse of the information by the firm's employees.
Anthony Long suspects that the employees found a way around the tracking system. By hovering over the unpublished press releases the headline of the news is displayed without the need of clicking on the article (which cannot be traced).
The headline may have been sufficient to capitalize on via trades in the stock market.
None of the allegations were proven in court at the time of writing. The OSC’s application is scheduled for 16 June 2022.
