COMPLAINT LETTER TO OSC: This is the copy of the letter that I am sending to the OSC. You may also complain by calling direct to the complaints department at the number below. Please feel free to give input on this letter. Also, if you think the letter is fine as is, send a copy to friends who have had similar problems with insider trading in other companies [on other stock exchanges also]. They could edit the letter to suit their cause as well. We can make a difference if many of us take the time to try and change what you find unfair. The more people involved, the more weight there is for a change.
Complaints
Suite 800
Box 55
20 Queen St. West
Toronto, Ontario
(416)597-0681
To Whom It May Concern,
This is a formal letter of complaint to address the unfair nature of
Insider Trading Laws. This letter describes the actions of insiders of various companies trading on exchanges in North America, specifically, the case of Corel Corporation . The insider trading law indicates that all insider trades should be declared in a timely fashion. Corel insiders, such as Michael Cowpland declared their trading 30 days after selling shares on an unsuspecting market using information they must have been privy to. This was at the same time that statements made by the CEO indicated that the company's situation was improving, and they would have a successful quarter. These statements sought to calm the market so that Mr. Cowpland and other executives would be able to sell their shares in a strong market. The insider trading law ensured that the insiders would be able to trade enormous amounts of shares, without other investors being alerted. In fact, it guaranteed that investors would purchase over-valued shares in a company that, unknown to them, was struggling with huge losses and future write-offs that must have been anticipated by Corel executives. Allowing this to continue is completely unacceptable.
The main issue that I am pointing out is that 30 days is neither timely nor fair to other investors not aware of the inner financial condition of a company. The insider trading law protects the actions of insiders and entirely neglects the obligation that the OSC has to protect ALL investors. The law should give a specific time frame for trades to be declared, such as 5 business days from the beginning of the trading. The appropriate document would be sent to the OSC and Stock Exchanges by mail, fax or a phone call. Another alternative that has been suggested before would be to "electronically tag" all insider trades. These options would allow timely disclosure and prevent law suits and general investor unrest. Nevertheless, something should be done. The current insider trading laws are jeopardizing the balance of the market. It is causing small investors to not participate as actively, or at all, in trading on the non-level playing field that presently exists.
Investors are becoming increasingly concerned with insider trading which contributes to the instability of a fluctuating market, greatly
increasing risk in all types of stocks. Small investors comprise a
large portion of the trades that are executed on any exchange for any
given day. This year's RRSP season should indicate to your organization that people are starting to move away from stocks and would rather have guaranteed certificates or cash as investment vehicles. The insider trading actions have led to class action law suits and numerous complaints in the past. It is time to change these laws to protect all investors instead of allowing some insiders to profit from the information that regular investors do not have. The actions of insiders serve their own purpose and have caused other investors to become wary of the stock market. As an agency which governs the TSE and has affiliations with other exchanges, it does not serve your own purpose to allow this to continue as it jeopardizes the participation of regular investors in the stock market.
I am looking forward to your detailed response in regards to this
matter, and what action you are willing to take to correct this problem.
Sincerely,
Wisam Raad |
