An Alberta Securities Commission panel has dismissed insider trading allegations against an Edmonton businessman, ruling Friday that there's no direct proof that Nizar Somji tipped off family members ahead of market-moving news at his former company.
"We found Somji's testimony to be generally forthright, and his specific denials credible. In short, we believed him," the three-judge panel said in its decision.
Somji was CEO of Matrikon Inc., a provider of software and information technology services to industrial customers that was acquired by technology giant Honeywell more than two years ago for $145 million.
The ASC's enforcement branch said Somji's brother-in-law, Kenneth Healing, made nearly $29,000 in profit by purchasing shares of Matrikon weeks before it announced a new multimillion-dollar contract with Norwegian energy firm Statoil and record quarterly results in January 2010.
Somji, his sister, and brother-in law were vacationing in Arizona at the time.
"As relatives occasionally in contact, whether in the same city or not, the opportunity for tipping was always there. Therefore, Somji's physical proximity to the Healings in Arizona at the time tells us very little. We note that the mere fact of direct interaction among them in December 2009 might have triggered in the Healings a revived and perfectly innocent interest in Matrikon," the panel said.
The ASC also says Healing purchased $245,000 in stock in the days leading up to the Honeywell acquisition announcement and made more than $36,000 in profit when he sold the shares.
Lawyers for the commission argued Healing's buying spree followed a telephone conversation between Somji and his sister, Healing's wife, four days before the announcement.
