AMF to Probe Fairfax CEO Watsa for Insider Trading

Chief executive of a renowned insurance and investment company Fairfax Financial Holdings Ltd., Prem Watsa, has announced that Quebec’s securities regulators, the Autorité des marchés financiers (AMF), is actively investigating him for possible illegal insider trading or unauthorized passing of information.

Mr. Watsa explained that the probe primarily focuses on the company’s conference call with analysts on Friday morning, after the company revealed its second quarter earnings on Thursday. According to Fairfax’s quarterly report, the AMF is looking into both Mr. Watsa and Fairfax president, Paul Rivett. It was mentioned that “we are fully co-operating with the authorities, and we are required strict confidentiality during the investigation.” Mr. Watsa added that “while we are not permitted to give you any further details at this time I can say there is no personal trading involved, and we are confident that we did nothing wrong.”

It was explained AMF mainly suspects possibility of insider trading, i.e. making a trade based on non-public information, or tipping, i.e. providing material information about a publicly-traded company to someone before the facts are publicly released. In its quarterly report, Fairfax alleged that if investigation looks into tipping, it will not involve “personal trading by the individuals.” Vice president of corporate development at Fairfax, John Varnell, alleged that “there is no question of personal trading here by Prem or Paul Rivett.” He added that there is “no reasonable basis for any proceedings.”

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