Insider trading – Penalty and orders against Jean-François Castonguay relating to the sale of RONA Inc.

Insurance Decisions and Freeze and cease trade orders

Montréal – On May 31, 2022, the Financial Markets Administrative Tribunal (the “Tribunal”) approved the agreement entered into by the Autorité des marchés financiers (the “AMF”) and Jean-François Castonguay.

In accordance with the terms of the agreement, the Tribunal imposed an administrative penalty of $84,114 on Mr. Castonguay. The Tribunal also suspended the rights conferred by Mr. Castonguay’s registrations in the insurance of persons and financial planning sectors and as a mutual fund dealer representative for a two-month period. Lastly, the Tribunal planned to attach to Mr. Castonguay’s registrations, upon the expiry of the two-month period, a condition that he carry on his activities under supervision for two years.

In its decision, the Tribunal noted that Mr. Castonguay admitted to the failures alleged by the AMF, i.e., trading in the securities of RONA Inc. while having privileged information (the sale of RONA Inc. to Lowe’s Company Inc.), in contravention of sections 187 and 189 of the Securities Act. The administrative penalty imposed by the Tribunal and which Mr. Castonguay agreed to pay represents twice the amount he earned from the trades.

The Autorité des marchés financiers is the regulatory and oversight body for Québec’s financial sector.

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