YBM president big on off-market sales
Last Updated: Thursday 25 June 1998 LOCAL BUSINESS
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YBM president big on off-market sales
Insider trading reports show almost half a million shares were disposed of at undisclosed prices.
David Baines, Sun Business Reporter Vancouver Sun
The president of YBM Magnex International Inc. sold only 25,000 shares at an average price of $12.33 on the Toronto Stock Exchange during the past 18 months, according to insider trading reports filed at the B.C. Securities Commission.
However, Jacob Bogatin disposed of another 383,846 shares at undisclosed prices to persons unknown in five off-the-market transactions during the same period, the reports show.
In a sixth transaction, executed in February, he transferred another 89,338 shares at an undisclosed price to "G. Bogatin," presumably a relative.
The effect of these dispositions was to remove 473,184 free-trading shares, or 48 per cent of his holdings, from his name to third parties who did not report their acquisition of those shares or any subsequent disposal.
If all the third parties -- including G. Bogatin -- sold all their shares at YBM's last closing price of $14.35, they would have grossed $6.8 million before brokerage fees.
The insider-trading reports, which are signed by Bogatin, describe the disposition of all six blocks of stock as "Code 25" transactions. Such transactions are defined by the commission as those that result in a "change in the nature of ownership."
Andrew Richardson, manager of statutory filings at the securities commission, said Code 25 "is normally used when an individual is reporting a change in ownership within his own holdings. So it's normally shown as two sides of a transaction: an acquisition and then a disposal, often from direct to indirect."
On Bogatin's reports, however, only one side of the transaction is shown -- the disposal.
Richardson added: "Sometimes it [Code 25] is used incorrectly to show a gift, for which there is separate code."
Whether these dispositions are actually gifts is not known. Bogatin and YBM representative Guy Scala did not return several phone calls Tuesday and Wednesday.
YBM's share price soared to more than $20 each in March on rapidly rising revenues and earnings.
Trading in YBM shares was halted May 13 after FBI agents raided the company's head office in Newton, Pa. The agents are believed to be probing alleged links between YBM and high-ranking Russian mafia members.
One of those mafia figures is said to be Semeon Mogilevitch, an original shareholder of YBM before it went public on the Alberta Stock Exchange in 1995.
YBM officials say Mogilevitch still owns about three per cent of the company's outstanding shares, but plays no management role.
On Sunday, the Bucks County Courier Times in Pennsylvania reported that Bogatin's nephew, Michael Kogan, 26, is president of a securities firm called Jefferson Gersch Inc., which sublet space in YBM's head office.
Kogan's lawyer, Nicholas Harbist, confirmed that Kogan and his securities firm have provided records to the U.S. government, but said there was nothing improper about the business relationship between Kogan and his uncle.
According to disclosure documents filed at the Alberta Securities Commission, a Roza Kogan was one of YBM's 31 original shareholders along with Mogilevitch and Bogatin. Her relationship to Michael Kogan, if any, is not known.
The securities firm was cited earlier this year by Pennsylvania regulators for failing to have proper registration.
According to findings in the case, the firm had handled transactions affecting accounts of 34 Pennsylvania residents between Jan. 1 and March 13. It is not known whether any of those trades involved YBM shares.
The brokerage firm settled the case by paying a $10,000 penalty and agreeing to halt operations in Pennsylvania. It encountered similar difficulties in Maryland where it agreed to pay a $5,500 fine, the newspaper said
Kogan said he is closing the firm in all states in which it is registered: California, Delaware, Florida, Maryland, Massachusetts, New Jersey, New York, Texas and Washington.
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