November 12, 2010
Bad Canadian lawyers. Still. According to the Ontario Securities Commission Mitchell Finkelstein, a partner at the Bay St. firm of Davies Ward Phillips and Vineberg, is alleged to have gathered information on were four major Canadian business transactions that took place between 2004 and 2007. Here's how the OSC describes Finkelstein actions in the complaint:
Kohlberg Kravis Roberts & Co. (“KKR”) acquisition of Masonite International Corporation (“Masonite”), announced December 22, 2004 (the “Masonite Transaction”) – Davies acted on behalf of Masonite and Finkelstein was counsel on the matter. On the evening of November 16, 2004, Davies’ lawyers, including Finkelstein, met with management of Masonite to discuss the Masonite Transaction.
In the following three days, there were several telephone contacts between Azeff and Finkelstein, the last one occurring approximately two hours before the first buy order was placed on November 19, 2005 by Azeff and/or Bobrow.On January 26, 2005, Azeff met with Finkelstein in Toronto. In the two days following the meeting, Finkelstein made two cash deposits in $50 and $100 bills to his two bank accounts.
Cash. He took cash. The OSC isn't clear on how much was deposited, but as any good lawyer knows, if you're making a large cash deposit banks are required to report it to the Treasury Department - in the US anyway. Canada has a similar requirement.
In any event, the OSC alleges that Azeff (the tippee) passed along the informatio to Miller who in turn sent the following e-mail out to clients:
Call me I have a tip … Stock trades on TSX at around $34 - cash takeover of $40 Timing should be before xmas but you never know with lawyers … I'm long
So what probably started out a tip to a friend in exchange for some extra walking around money got broadcast over the Internet in the form of an e-mail to clients that identifies the source of the info as a "lawyer". Great.
OK, kids, don't do this at home.
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