May 11, 2011 Securities

Montréal - The Autorité des marchés financiers ("AMF") has launched proceedings for illegal insider trading against various officers at MEGA Brands Inc. before the Bureau de décision et de révision ("Bureau") and is claiming amounts totalling $6,490,375.

The proceedings launched by the AMF pertain to trading in the securities of MEGA Brands as of December 14, 2005 by Marc Bertrand, President and Chief Executive Officer of MEGA Brands, Vic Bertrand, Chief Innovation Officer of MEGA Brands, Alain Tanguay, former Chief Financial Officer of MEGA Brands and Brahm Segal, former Vice-President, Business Development of MEGA Brands.

The AMF maintains that the transactions were illegal insider trades because the respondents held information that was not available at the time to the public, namely, that a young boy died apparently as a result of swallowing magnetic pieces that became detached from a toy manufactured by Rose Art Industries, a subsidiary of MEGA Brands.

Specifically, the AMF has applied to the Bureau to order the brothers Vic and Marc Bertrand to each pay a total of $2,893,750. In addition, the AMF is asking the Bureau to order Alain Tanguay to pay $468,500. And finally, the AMF is asking the Bureau to order Brahm Segal to pay $234,375.

The Autorité des marchés financiers ("AMF") is the regulatory and oversight body for Québec's financial industry.

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