OSC reaches settlement with former legal assistant who tipped on major M&A transactions

On April 20, 2018, the Ontario Securities Commission (OSC) reached a settlement with Donna Hutchinson, a former legal assistant, for providing a friend of hers with material non-public information to which she gained access through her employment.

The allegations against the friend, Cameron Cornish, as well as two individuals who Cornish passed this information onto and who then traded on the information – Patrick Caruso and David Sidders – remain the subject of ongoing OSC proceedings.

Hutchinson was granted substantial credit for cooperation, and agreed to cooperate fully with OSC Staff in the proceedings against Cornish, Caruso, and Sidders. Notably, the OSC cited the fact that Hutchinson earned only small sums compared to those earned by the other respondents, and that she was “manipulated” by Cornish, an experienced trader who knew the value of the information provided by Hutchinson.


OSC Staff issued allegations of insider trading and tipping against Hutchinson, Cornish, Caruso, and Sidders in September 2017.

OSC Staff alleged that Hutchinson provided Cornish with confidential information about a series of take-over bids between October 2011 and April 2016, all in contravention of the Ontario Securities Act prohibitions against insider trading and tipping. OSC Staff alleged that Cornish then passed this information onto Caruso and Sidders, who then traded on the information. The allegations noted that Hutchinson’s position as a legal assistant working on M&A transactions in a law firm left her well-placed to obtain highly confidential, material non-public information, which was then passed on to a wider insider trading ring spanning Panama, Bermuda, and the British Virgin Islands.

The settlement

As part of the settlement with OSC Staff, Hutchinson agreed to certain facts, including that she had tipped Cornish in respect of six M&A transactions. In addition, she acknowledged that she breached Ontario securities law by contravening the prohibition against tipping pursuant to s. 76(2) of the Securities Act, and consented to sanctions that included a two-year ban on trading in securities and derivatives and on becoming/acting as a director or officer of any issuer, registrant, or investment fund manager.

OSC Staff noted several mitigating factors, including that Hutchinson:

  • Acknowledged her involvement in the matter (and so OSC Staff will not have to spend further resources to establish her liability);
  • Lost her position as a legal assistant, and is without resources to pay monetary sanctions;
  • Received small sums of money as a result of the misconduct, compared to the much larger profits made by the other respondents, who had conducted the insider trading;
  • Had no prior record of breaching Ontario securities law;
  • Was “manipulated” by Cornish, an experienced trader; and
  • Agreed to cooperate with OSC Staff in its investigations against the other respondents, including testifying as a witness in any proceedings related to the misconduct admitted in the settlement agreement.

An OSC Panel approved the settlement on April 24.


The settlement highlights once again the benefits to respondents of cooperating with OSC Staff, especially when such cooperation can assist OSC Staff in pursuing more serious violators of securities law. This concern was particularly acute in this case, because although the Ontario Court of Appeal in Finkelstein reaffirmed the reasonableness of finding insider trading and tipping liability based on circumstantial evidence, it makes securing a conviction particularly difficult. As such, the panel noted that Ms. Hutchinson’s agreeing to provide direct evidence against the other respondents was a particularly valuable form of cooperation.

The settlement is also significant for what it does not talk about. As we have previously written, organizations such as major law firms employ hundreds of people and cannot completely eliminate the potential for misconduct by individuals at all levels of the organization. What they can do is implement and enforce appropriate policies and procedures to manage these risks and secure confidential information.  The firm that employed Ms. Hutchinson is not named in the settlement agreement, and the panel approving the settlement did not consider it necessary to name it in their reasons. From the standpoint of an organization, that is as good an outcome as can be hoped for in the circumstances, and presumably reflects well on the firm’s practices and procedures.