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Rob
Insider trading site seen down for weeks
Richard Blackwell
00:00 EST Saturday, February 02, 2002
The new national electronic reporting system for insider trades has crashed, sending corporate directors, officers and major shareholders back to their fax machines to send in their reports on paper.
The System for Electronic Disclosure by Insiders, or SEDI, was shut down Thursday night after technical problems slowed it to a crawl. It likely will be off-line for several weeks.
Individuals who were trying to report their trades by filling out electronic forms on the Web site found that the process was extremely slow, said Eric Pelletier, spokesman for CDS Inc., the agency that developed SEDI for the provincial and territorial securities regulators.
Pages appeared so slowly that the site's security features cut off some users before they could complete a form, he said.
Complaints were frequent and intense, Mr. Pelletier said. "You can't print some of the things they said."
The system appears to be overloaded, Mr. Pelletier said, but "we don't know exactly what the problem is, and we don't know exactly what the solution will be." It will be "a matter of weeks" before it's back up, he added.
In the meantime, those who need to file will have to resort to the old system of sending in paper trading reports. Some must also revert to filing to several provincial commissions. SEDI had eliminated multiple filings by combining all the jurisdictions in a single database.
Corporate insiders are allowed to trade in shares of their companies so long as the transactions aren't made with the benefit of undisclosed information, and provided the trades are reported to provincial securities commissions within 10 days.
For investors who want to scan the insider filings, the SEDI's shutdown will be a headache because the site also disclosed trading information to the public.
Some regulators, such as the British Columbia Securities Commission, will go back to listing insider trades on their own Web sites. The Ontario Securities Commission will resume publishing insider reports in its printed bulletin.
The SEDI system has been plagued by problems from its inception.
When it was first promised in 1999, the goal was to have it in place by mid-2000. After many delays, public companies and insiders began registering last October, and all trades were to be reported electronically as of Jan. 21.
Problems immediately became apparent, and last weekend the system was shut down for two days while software engineers tried to speed it up.
There was some improvement, Mr. Pelletier said, but it wasn't enough, so the regulators decided to pull the plug.
Copyright © 2001 The Globe and Mail
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