OSC accepts settlement with ex-Aston Hill senior executive in tipping case

TORONTO – A former senior executive at Aston Hill Asset Management has agreed to pay $11,000 and accept sanctions for providing a client with secret information about the US$4.9-billion purchase of PokerStars by Amaya Inc.

Under a settlement deal with Ontario’s securities watchdog, John David Rothstein will pay a $5,500 administrative penalty and give up $5,500 that he made from Amaya shares (TSX:AYA) in June 2014.

Rothstein, who was national sales manager at Aston Hill, also accepted limitations to his activities in the investment industry, including a two-year ban on trading or acquiring securities except for his personal registered savings accounts.

The regulator said the settlement agreement with Rothstein granted “substantial credit” for co-operation, including in the future, and other circumstances including his unemployment as a result of the investigation.

The settlement was accepted by a panel of the Ontario Securities Commission on Tuesday, less than a week after the regulator levelled insider tipping and trading allegations surrounding Amaya’s 2014 purchase of PokerStars.

In its statement of allegations, the OSC says Benedict Cheng, who was president and co-chief investment officer at Aston Hills Financial, “instructed, encouraged and/or suggested” Rothstein to inform those who lost money on other investments promoted by Aston about the Amaya deal before it was announced.

Rothstein then passed along the information to Frank Soave, an investment adviser at CIBC Wood Gundy, the document alleges.

The OSC also alleges that Cheng, Soave and Aston Hills Financial CEO and chairman Eric Tremblay made misleading or untrue statements to investigators.

Allegations against the three men have not been proven. Another OSC hearing is scheduled for May 4.