Nstein Technologies - Tribunal administratif des marchés financiers imposes over $440,000 in fines

Securities Decisions and Freeze and cease trade orders

Montréal – On August 16, 2016, at the request of the Autorité des marchés financiers (the “AMF”), the Tribunal administratif des marchés financiers (the “Tribunal”) issued a total of $441,500 in administrative penalties against Luc Filiatreault, Bruno Martel, Stéphanie Benoit, Rainer Busch, André Courtemanche, Pierre Donaldson, A. Michel Lavigne, Michel Lozeau, Colette Roy and Pierre Légaré for breaching various provisions of the Securities Act. With the exception of Pierre Légaré, Bruno Martel and Stéphanie Benoit, all the respondents were members of the board of directors of reporting issuer Nstein Technologies (Nstein).

This matter stems from the acquisition of Nstein in April 2010 by Open Text through a merger.

The Tribunal found the respondents Luc Filiatreault and Pierre Légaré guilty of wrongdoing related to the transmission and use of privileged information involving Nstein. The evidence submitted by the AMF shows that, several days before the acquisition of Nstein was made public, Luc Filiatreault, then CEO of Nstein, suggested to his accountant Pierre Légaré that he was looking for a buyer to acquire Nstein and that he would soon be out of a job. Mr. Légaré traded shares of Nstein based on that information.

As for the second component of this matter, the Tribunal found Luc Filiatreault and the respondents who were on Nstein’s board of directors guilty of trading in the securities of a reporting issuer while having privileged information. The evidence submitted by the AMF shows that, on January 4, 2010, the Board authorized the granting of 1,200,000 options to purchase shares of Nstein to Luc Filiatreault, Bruno Martel, Stéphanie Benoit and other employees, knowing that Open Text had made a verbal takeover offer in November 2009 offering a 100% premium on the strike price of Nstein shares as of that date.

The Autorité des marchés financiers (the “AMF”) is the regulatory and oversight body for Québec’s financial sector.

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