Friday, January 06, 2006

SEC looking into Canadian income trust trading.

Canada: The liberals are not having a good week.

SEC probes income trust trading No further information will be forthcoming, U.S. securities regulator tells NDP MP Jan. 6, 2006. 07:35 PM CANADIAN PRESS OTTAWA — The American securities regulator is taking "very seriously" complaints of insider trading involving Finance Minister Ralph Goodale's November announcement on income trusts. There is also a signal that the Ontario Securities Commission may be doing the same. The U.S. Securities and Exchange Commission revealed it is reviewing the matter in an e-mail Thursday to Judy Wasylycia-Leis, the New Democratic Party's finance critic who filed a complaint with the market watchdog last month. "We are taking your complaint very seriously and have referred it to the appropriate people within the SEC," the market watchdog's legal counsel, Ann H. Sulzberg wrote. Wasylycia-Leis asked the SEC to investigate a suspicious spike in trading of income trust units and related stocks in the hours before Goodale's Nov. 23 announcement. He announced, after markets closed that day, that he would not be changing the tax treatment of income trusts but would, instead, cut taxes on corporate dividends. An unusual volume of trading was noticed on the New York Stock Exchange as well as the Toronto Stock Exchange. Sulzberg went on to say that the SEC "generally conducts its investigations on a confidential basis and neither confirms nor denies the existence of an investigation unless we bring charges against someone involved." Hence, she informed Wasylycia-Leis, no future updates on the status of her complaint will be provided. The SEC's interest follows last week's explosive revelation that the RCMP has launched a criminal investigation into the income trust affair. Prime Minister Paul Martin has tried to play down the significance of the investigation, suggesting it's simply a routine procedure prompted by politically motivated allegations of wrongdoing in the middle of the election campaign. But Wasylycia-Leis, who also filed the initial complaint with the RCMP, said the SEC's involvement proves there's more than politics at play. "I don't think the SEC would write this kind of note, saying they're taking this complaint very seriously, if they didn't have some reason to think it was a significant issue," she said in an interview today. "I think it makes a mockery out of the Liberals' whole approach to this issue. They've tried repeatedly to move this off the agenda by belittling the issue, by belittling the opposition."

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