CTV has broadcast new evidence showing that the run on income trusts at the Toronto Stock Exchange in the hours prior to Finance Minister Ralph Goodale’s favorable policy announcement was not a lucky guess by the investment community. In their broadcast last night, reported by blogger MK Braaten, three investors acknowledged either to CTV or in e-mails to their associates that they had insider tips from “well-connected Liberals”:
* Don Drummond, VP/Chief Economist: CTV said that Drummond told them he first heard about the announcement via email, 4 hours in advance of announcement. Also, stated that Liberal strategists in Ottawa were the source of email. CTV quoted Drummond as saying “Alot of people seemed to know there was an announcement coming and a few people seemed to know what it was.”
* Jim Leech, Teachers pension fund – CTV said that Leech received emails at about 2 pm stating that the announcement was guaranteed. CTV Quoted Leech “I got a bunch of emails around 2pm saying for sure Goodale was making an announcement after the close.”
* Sandy Mcintyre, Sentry Select Capital: CTV reported he sent the following email: “There is a strong rumour out of Ottawa that Goodale is going to pronounce after the close today his trust solution…hope my sources are right!” Mcintyre said his sources were quoting ‘well connected Liberals’.
* Richard Nesbitt, CEO TSX Group: According to CTV, Nesbitt purchased $759,000 worth of stocks hours before the announcement and made $100,000 in profit the next day. However, he could not be reached for comment, yet his spokesman said that he was only filling up his core holdings before the calendar year end.
The last person shows a particularly egregious conflict of interest. The TSX Group is a private company that runs the Toronto Stock Exchange, and so functions in a quasi-regulatory capacity. If the CEO of TSX Group took part in this insider trading conspiracy, it could destroy all confidence in the fairness and legitimacy of Canadian trading altogether. The Liberals may have succeeded in completely corrupting the environment where many ordinary Canadians have trusted their retirement money for investments.
No wonder the RCMP has decided to conduct a criminal investigation. And the leak may not have come from Goodale or his office, either, although it had to come from someone within the government with knowledge of Goodale’s policy decision ahead of time. That could have also included the Prime Minister’s office as well as Goodale’s. Perhaps the Finance Minister’s refusal to resign means something quite different than first thought.
Will voters continue to support the Liberals through another financial scandal, with the latest one developing into a far more personal threat to their own finances? It seems doubtful that Paul Martin can rely on scandal fatigue now.