A prominent Montreal lawyer charged with buying stock when he had privileged information about a privatization offer has been cleared of a charge of insider trading. But charges against others involved in the deal are still pending.
Peter Blaikie was charged last year with trading in the shares of Memotec Data Inc. The company had won a bidding war for Teleglobe Canada, which was being privatized by the federal government. Mr. Blaikie and another lawyer in his firm were doing consulting work on the deal.
Judge Yves Lagace said that Blaikie did indeed know that Memotec Data was going to make a bid for Teleglobe but that such information could not be considered privileged information.
Blaikie bought 1,000 shares of Memotec Data at $10.50 (Canadian; US$8.40) a share before the announcement on the privatization deal was made but after Blaikie had been dealing with the firm. But the judge accepted Blaikie's argument that he had planned to buy the shares several months earlier.
The Quebec Securities Act defines insider trading as using knowledge about an important fact, unknown to the public, which might affect share prices. The judge noted that there was a rumor about the Memotec deal in financial circles before Blaikie bought his shares.
``I'm delighted,'' Blaikie said of the verdict. ``I knew I had done nothing wrong and I have faith in the system of justice, so I was calm throughout.'' Blaikie is a former president of the Progressive Conservative party of Canada, which has been in power in Ottawa since September of 1984.
Blaikie had purchased the shares for a long-term hold in his tax-sheltered retirement savings plan. The shares have done well, rising to C$14.67; Memotec Data had profits of C$48 million in fiscal 1987, compared with C$5 million in 1986.
Several other people were also charged with insider trading involving the Memotec Data deal; their cases will come up later this year.