Alberta Securities Commission staff have issued a notice of hearing alleging that a Calgary couple breached Alberta securities laws by engaging in illegal insider trading in shares of former Calgary oil and gas company Provident Energy Ltd.
ASC staff allege that in late 2011, Sherry Hagerty told her husband Gary Hagerty about the potential purchase of Provident Energy by Pembina Pipeline Corp. (TSX: T.PPL, Stock Forum), material information that had not been publicly disclosed.
The ASC is alleging that Sherry became aware of a pending transaction between the two companies on December 22, 2011 when she was a corporate risk manager with Pembina.
When she was formally advised by Pembina’s general counsel about a potential transaction between Pembina and Provident at around 9:30 a.m. on December 23, 2011, Sherry was also informed that she was an insider, and was therefore prevented from trading in securities of both companies.
ASC also allege that Gary Hagerty was aware of the potential transaction when he bought 5,000 Provident Energy shares on December 23, 2011 at around 11:12 a.m., paying $9.89 per share.
On January 16, 2012, Pembina announced that it was buying Provident for $3.1 billion in stock, thereby creating one of Canada’s largest publicly traded energy-infrastructure companies.
On February 8, 2012, following the announcement that Pembina had agreed to buy Provident, Gary allegedly sold 5,000 Provident shares at $11.88 per share, for a profit of $9,942.
ASC are also alleging that that Gary and Sherry Hagerty made misleading or untrue statements to ASC investigators.
These are allegations which remain untested in a court of law. Therefore the couple are presumed to be innocent until it is proven otherwise.
A set date hearing is scheduled for May 6, 2013 in Calgary at the commission office.
On Tuesday shares of Pembina Pipeline rose 0.61% to $31.58, leaving the company with a market cap of $9.7 billion, based on 306.1 million shares outstanding. The 52-week range is $32.13 and $24.86.