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Air Canada Fined $1M in Disclosure Case
Securities regulators penalize airline over profit warning
From Canadian Press
Air Canada has been fined more than $1 million insettling a corporate disclosure case with securities regulators in Ontario and Quebec, which accused the airline of giving analysts an early warning of lower company profits last year.Ina decision Friday the Ontario Securities Commission and the Quebec Securities Commission announced they had approved a settlement reached earlier this week with Canada´s dominantairline.
Air Canada, which is based in Montreal, will pay $500,000 to each commission. In Ontario, the money will go towards investor education, while in Quebec, the cash will helpfinance the regulator´s operations. Another $80,000 was added to the sum to cover the Ontario Securities Commission´s investigation costs.
The decisions of the provincial regulators alsoforce Air Canada´s auditors to report quarterly on its disclosure compliance. The report has to be made public and available to members of the commission, according to the settlement.Frank Switzer, spokesman for the Ontario, commission, called the penalities significant and appropriate under the circumstances.
“I think it sends a clear message to public companiesthat they should not be able to favour institutional investors. I think it was made very clear by the panel that this is meant to serve as a warning.
Regulators has accused Canada´sdominant airline of passing material information to a select group of analysts last October, breaking provincial securities laws, Toronto Stock Exchange rules and the airline´s owninternal guidelines.
Securities regulators wrangled over what to do about the accusations for months, saying there was no precedent for the selective-disclosure case.
The commission