British Columbia Securities Commission

British Columbia Securities Commission

September 10, 2012 15:00 ET

Supreme Court of Canada Dismisses Torudag Application for Leave to Appeal BCSC Decision

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 10, 2012) - The Supreme Court of Canada has dismissed Kegham Kevin Torudag's application for leave to appeal a November 2011 decision of the British Columbia Court of Appeal, which upheld a British Columbia Securities Commission decision that he engaged in illegal insider trading.

Torudag helps reporting issuers to raise money and performs investor relations activities for them, including assistance in "getting their story out" to investment analysts and investors. He is an active trader in junior public companies, primarily in the resource sector, and in recent years has made a significant portion of his living by trading on the TSX-Venture Exchange.

During his original hearing with the BCSC, Torudag admitted purchasing shares in Icon Industries Limited while being a person in a special relationship with Icon and having undisclosed material facts about the company, in contravention of BC's insider trading rules. He admitted the contravention, subject to the defence in the rules - that he reasonably believed that the material facts had been generally disclosed when he purchased the Icon shares.

Based on Torudag's admissions, the commission panel found that he contravened BC's insider trading rules, and that he did not establish a defence under the rules. The panel found that Torudag, before purchasing the Icon shares, did not hold a reasonable belief, and failed to take all reasonable steps necessary to establish, that the material facts about Icon had been generally disclosed.

Also at the original hearing, Torudag claimed he was not subject to the BCSC's jurisdiction or the Securities Act because he was not in BC when he conducted the trades. The panel disagreed. In the Court of Appeal, Torudag argued that was the sole issue to be decided. The Court of Appeal dismissed the appeal and upheld the commission's view that because the BCSC regulates the Venture Exchange, they can prosecute illegal insider trading on the Venture Exchange. In effect, anyone who trades on the Venture Exchange, regardless of their location, is subject to the Securities Act.

In March 2009, a commission panel ordered, with limited exceptions, that Torudag cease trading securities for one year, and also ordered that he pay a fine of $36,771. These penalties, which were stayed during the original appeal and again during the application for leave to appeal to the Supreme Court, are now active again. Torudag has paid his financial sanction. The cease trade order will remain in effect until April 17, 2013.

The BCSC is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the original decision on our website,, by typing Torudag or 2009 BCSECCOM 339 in the search box. Information regarding disciplinary proceedings can be found in the Enforcement section of the BCSC website.

Please visit the Canadian Securities Administrators' Disciplined Persons List for information relating to persons disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA).

If you have questions, contact Richard Gilhooley, media relations, 604-899-6713. For public inquiries, call 604 899 6854 or 1 800 373 6393 (toll free).

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Contact Information

  • British Columbia Securities Commission
    Richard Gilhooley
    Media Relations
    604-899-6713 or (Canada) 1-800-373-6393