OSC: Duo Profited From Inside Information About KKR Deal

Sep 27 2010 | 2:29pm ET

Regulators have accused a pair of Canadian stockbrokers of profiting on insider information about an acquisition by Kohlberg Kravis Roberts.

The Ontario Securities Commission allege that Howard Miller and Man Kin Cheng, both formerly of TD Waterhouse Canada, pushed family members and clients to buy shares of Masonite International after learning that the door manufacturer had negotiated a deal to be acquired by a KKR unit six years ago.

According to the regulator, an e-mail sent by Miller to a client on Nov. 24, 2004, proves that the duo were trading on confidential information. The OSC said Miller told the client that a “cash takeover of $40” was imminent at Masonite, likely “before Xmas but you never know with lawyers.” In fact, the deal was announced three days before Christmas.

In the interim, Miller, Cheng, their families and clients bought up C$2.35 million worth of Masonite shares. The OSC said Miller turned an illegal profit of C$53,500, while Cheng and his family earned C$58,300.

The OSC did not explain how Miller had come into the information, except to say that he learned about it from someone he knew.

There is a hearing scheduled for Oct. 18.

In Depth

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…