The CBC now reports that even with an RCMP investigation pending, Liberal Finance Minister Ralph Goodale refuses to resign his position. The RCMP announced earlier today that after reviewing the trading activity immediately before Goodale’s announcement on the Martin government’s policy on income trusts, they would start a criminal investigation into insider trading based on activity around the FMO:
Finance Minister Ralph Goodale said Wednesday night in an interview on CBC’s The National that he is not going to bow to political pressure and step aside while the RCMP conducts a criminal investigation into a possible leak of information from his department.
“The RCMP said in their statement of this afternoon that there is no evidence of any wrongdoing on my part- or on the part of anyone else for that matter,” Goodale said in an interview with the CBC’s chief correspondent Peter Mansbridge. …
Questioned repeatedly about why he won’t step aside until the investigation is complete, Goodale said it is not the RCMP that has made allegations about him personally, “the opposition have made those allegations.”
The RCMP, said Goodale, “have said they are looking into this matter because of the seriousness of the allegation. They have, at the same time, said they have no information, no evidence of any wrongdoing on the part of anyone – most particularly on my part – and quite frankly if I were to resign under those circumstances I believe I would only feed allegations that are out there in the context of a very political situation.”
At the same time, the RCMP must have determined that the trading patterns, as we’ve discussed before, show something worth investigating regardless of who made the complaint. As for the allegations not being evidence, that much is true of any complaint made of any crime. The difference is that when the RCMP makes an initial review and determines that they have cause to open a criminal investigation, they must have found some reason to take it to the next level.
In an exclusive look at what the RCMP may have found, an anonymous source familiar with Canadian markets has done more research into the alleged damage done by the insider trading. This person estimates that insider trading on November 23rd on the TSX (not the NYSE) netted at least Cdn $10 million of ill-gotten gains from the five income trusts and dividend paying common shares cited in media prior to the Minister Goodale announcement of no tax on income trusts and materially lower taxes on dividends. There would be other income trusts and dividend paying corporations not in this list where illegal insider trading likely also occurred. The investigation will need to do an analysis of unusual volume and price upticking in all income trusts and dividend paying corporations to discern where likely illegal insider trading occurred. Then, of course, there would need to be an investigation on who did it, what exactly they were told and by whom.
ESTIMATED ILL-GOTTEN GAINS FROM ALLEGED ILLEGAL INSIDER TRADING
Methodology (1) : Took increase in volume on 11/23/05 from avg 10 previous days’ volume and prorated the increase in market value between purchases on 11/23/05 and valuation at the opening price on 11/24/05
YELLOW PAGES………… $616,155
TOTAL OF ABOVE……$10,905,712
We’re not talking peanuts here, people. Those who had access to that information prior to its release stood to make a lot of money — and would have a great deal of loyalty to the Liberal Party that allowed them to glean that cash off of the losers who traded without the prior knowledge of Liberal tax policy changes. Who might have comprised the loser’s contingent? A significant percentage of the ownership lives outside of Canada — 24%, to be exact. Any country whose investors lost money in the transactions could sue for damages, including the US. The countries could also launch their own investigations into the insider-trading scandal, a development that would undoutedly worry the Liberals much more than an RCMP investigation. After all, they can’t control the SEC the way they can control the OSC or even perhaps the RCMP.