NATIONAL POST.......IT'S ENDLESS..OSC blocks UBS insiders from trading
Probe could expand: Filed 'misleading and untrue' reports, regulator says
Sinclair Stewart
Financial Post
The Ontario Securities Commission has imposed cease-trade orders on the former head of Unique Broadband Systems Inc. and a host of other company insiders, accusing them of violating securities law by filing "misleading and untrue" reports and failing to make proper disclosure.
The provincial regulator, which began investigating the wireless technology company late last year, also indicated yesterday it would expand its probe to determine whether the group engaged in other activities that may have been contrary to the public interest.
Alex Dolgonos, who resigned from UBS in July, was slapped with the temporary cease-trade along with a number of relatives, including his wife, mother and father. Former chief financial officer Stephen Rosen and Gerald McGoey, who is being backed by Mr. Dolgonos for election to the board of directors at UBS, are also prohibited from trading in the company's stock.
"I'm not trading the stock anyway," said Mr. Dolgonos, who added he had yet to see the OSC statement of allegations.
Mr. Dolgonos has been entangled in a bitter legal dispute with UBS since October, when he sued the company after it issued a proxy circular accusing him of improperly exercising stock options and using the corporate coffers to pay his wife's medical bills.
Both sides settled the matter in January, after agreeing that none of the current directors -- including Mr. Dolgonos -- would seek re-appointment to the board at the company's annual meeting on Monday.
Mr. Dolgonos, whose group controls an estimated 30% of UBS stock, attributed the OSC's accusations of improper disclosure to legal mistakes and said he has spent more than $400,000 on lawyers' fees battling the company he founded.
"Whatever errors were made on behalf of lawyers were corrected. I'd prefer to get it over with and build the contracts with the goddamn company."
The OSC announcement, however, could complicate what already promises to be an animated shareholders' gathering next week. It is unclear how the order against Mr. McGoey, who is part of a proposed slate of new directors, will affect the outcome of the vote.
A spokesman for the OSC declined to comment on specifics of the investigation, but said the timing of the cease-trade orders was coincidental with the date of the company's annual meeting. Neither Mr. McGoey nor Mr. Rosen could be reached for comment.
Meanwhile, a rival high-tech firm, Plaintree Systems Inc., has launched a dissident movement aimed at collecting proxies from UBS shareholders and nominating its own slate of directors. David Watson, Plaintree's chief executive, said yesterday the company would like to see an "independent board" at UBS that would be interested in striking a business partnership with his firm.
Patrick Lavelle, chairman and interim chief executive of UBS, said the company's directors have agreed to meet Plaintree representatives at a UBS board meeting today.
"It's just another in a series of surprises that we've had in the past 12 months," said Mr. Lavelle, referring to the OSC's actions. "In an era of corporate governance, it is an interesting case history."
sstewart@nationalpost.com