OSC cracks down on illicit profits from confidential Score Media acquisition information
A $390,000 insider trading scheme orchestrated around the acquisition of Score Media & Gaming Inc. has resulted in a two-year market ban and a $120,000 disgorgement for Ontario resident Jessica Tam, according to a settlement approved by the Capital Markets Tribunal.
As reported by the Ontario Securities Commission (OSC), Tam received material non-public information about the Score acquisition from Huy Le (Alvin) Huynh, then vice president of Finance at Score.
Huynh devised the scheme, offering Tam funds and trading instructions in exchange for 80 percent of the profits, while Tam retained 20 percent. Huynh’s spouse, Thi Anh Nguyet (Nancy) Pham, was aware of the arrangement.
Following Huynh’s instructions, Tam purchased 304 Score call options for less than US$7,000 through her TFSA in late July and early August 2021.
After the public announcement of the acquisition on August 5, Tam sold the options for US$318,800, generating trading profits of approximately US$311,000, as per the settlement documents.
The OSC reported that Tam made multiple cash payments to Huynh and Pham, totalling $180,000, using codewords over instant messaging to arrange the transactions.
The codeword “toys” was used, with one toy referring to $10,000.
According to the OSC, Tam has accepted responsibility for her role, cooperated fully with the investigation, and agreed to testify in any future enforcement proceedings.
The Tribunal’s order prohibits Tam from trading or acquiring securities for two years, except for certain registered accounts and only through a registered dealer in Ontario.
She has also disgorged $120,000 of the total profits, while Huynh has already disgorged the remaining $270,000 in a separate settlement.
“Insider trading erodes public trust in our capital markets and undermines the integrity of our financial system,” stated Bonnie Lysyk, executive vice president, Enforcement at the OSC.
“The OSC will continue to protect investors by taking action against individuals who seek to exploit confidential or market sensitive information”.
