Insider trading can be a slippery slope for in-house counsel

When Claude Chagnon, a former chief executive officer of one of Canada’s largest cable companies, was sued for more than $23 million for allegedly improperly profiting from insider trading nearly a decade ago, one of his lines of defense was to put the blame squarely on the shoulders of an in-house counsel.

It was not a compelling argument. In a ruling that provides guidance over allegations of insider trading, clarifies insider trading rules applicable to corporate officers and sheds light on the meaning of privileged information under the Quebec Securities Act, Quebec Superior Court paid little heed to the claim that the in-house counsel was partially at fault because he breached his professional duty.

In-house lawyers across the province may have heaved a sigh of relief at the ruling which dismissed the suit brought by Quebecor Media Inc. and its cable subsidiary Vidéotron Group Ltd. against Chagnon, but the action also underlines the mounting exposure to liability in-house counsel now face. Complex and constantly evolving regulatory schemes requiring corporations to meet a slew of compliance and disclosure duties may have vaulted corporate counsel Into key management positions — but at a premium. In-house counsel are expected to shoulder the imposing responsibility of ensuring that their companies comply with the complicated domestic and international regulations, including legal requirements for insider trading.

“In-house counsel have the burden of regulatory compliance,” noted Jonathan Levin, a corporate lawyer who was the former chair of the Fasken Martineau DuMoulin LLP’s partnership board. “If there is a regulatory issue of non-compliance, the in-house counsel almost always has to live with the consequences because they are viewed as the person on the ground who should know the regulatory regime applicable to the company and should be in charge of making sure that there is compliance with it.”

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Rwandan war criminal sentenced to life in prison

When Justice André Denis of Quebec Superior Court condemned Désiré Munyaneza to life in prison with no chance of parole for 25 years after being convicted of genocide, war crimes and crimes against humanity for his role in the Rwandan genocide of 1994, it put a cap — for the moment — on a costly trial that took place over two years on three continents while serving notice that the legal obstacles surrounding war crime trials are not insurmountable.

Followed closely by international legal observers, the precedent-setting case may have to put to rest a widely-held perception that Canada is a haven for war criminals and may go so far as even set the stage for future prosecutions of war criminals in Canada and abroad.

“Canada’s willingness to go the extra mile, collecting evidence and hearing witnesses in Rwanda, culminating in a well-written judgment by Justice Denis and a strong sentence, sends a clear message to genocidaires, past, present and future, that you will not find sanctuary in Canada,” said Frank Chalk, the director of the Montreal Institute for Genocide and Human Rights Studies at Concordia University and co-author of “The History and Sociology of Genocide.” “The judge clearly delineated the difference between waging war amidst a civil war and committing mass atrocity crimes. His distinctions provide useful boundaries for future prosecutions.”

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Former politician loses right to practice accounting

A former Quebec politician who served a six-month sentence after being found guilty of five counts of fraud and three counts of breach of trust by a public official recently lost a legal battle against the disciplinary committee of the Quebec Order of Chartered Accountants who had revoked his license for life.

In a 17-page ruling, Quebec Superior Court Judge Claude-C. Gagnon dismissed Jean Fillion’s suit to overturn the sentence handed against him by the professional corporation.

“He is seeking conclusions that neither more nor less attempt to rewrite history, rescind the negative effects on his reputation, legitimize actions he was found guilty of by previous rulings by the courts, and ultimately exonerate his name to facilitate his return back into the labour market,” said Judge Gagnon.

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Montreal animator awarded $5.2 million after a 13-year copyright battle

When Florence Lucas received the hefty brown envelope on a weekday morning in late August, she resisted the temptation to open it immediately even though she knew that a 13-year long legal battle pitting a determined and resolute Montreal animator against a major studio production company was possibly about to reach its denouement.

The Montreal lawyer with Gowling Lafleur Henderson LLP instead called her client, Claude Robinson, whose “tenacity, energy and determination was indispensable to face the legal guerilla,” and waited for him. “We both jumped to the conclusion right away, and then leapt with joy,” said Lucas, who specializes in intellectual property, media and entertainment law.

Robinson, who launched in July 1996 a $2.53-million copyright-infringement lawsuit against the Cinar Corp. and other defendants claiming they stole a cartoon character he created, was awarded more than $5.2 million, including $400,000 for psychological distress, $1-million in punitive damages, and $1.5-million to cover legal fees. Continue reading “Montreal animator awarded $5.2 million after a 13-year copyright battle”

Insider trading ruling highlights differences between Quebec and the rest of Canada

ruling that dismissed allegations that a former chief executive officer improperly profited from inside trading nearly a decade ago provides guidance over allegations of insider trading, clarifies insider trading rules applicable to corporate officers, and sheds light on the meaning of privileged information under the Quebec Securities Act (Act).

“It’s an important decision in the sense that it is one of the only, if not the only case in Quebec, where there is a judgment following a civil action based on an allegation of insider trading,” noted Raynold Langlois, who successfully defended Claude Chagnon against an action seeking damages of more than $23 million brought by Quebecor Media Inc. and Vidéotron Group Ltd.

“It will be helpful for lawyers involved in corporate governance and who advise officers and directors of corporations as to how they should conduct themselves when they obtain information or hear rumors that could be indicative of a prospective transaction in their company. That’s always a very difficult opinion to give, and this judgment certainly goes a long way in clearing up the law,” added Langlois of Langlois Kronström Desjardins. Continue reading “Insider trading ruling highlights differences between Quebec and the rest of Canada”

Man ordered to pay $39,000 for illicitly filming sexual escapades

A Quebecer who filmed and took pictures of sexual escapades with a 20-year old woman and then distributed it on the Internet was ordered to pay $39,000 in damages.

In a brief four-page ruling, Quebec Superior Court Judge Sylviane Borenstein held that the man breached her fundamental rights by intentionally and illicitly invading her privacy, and that his conduct cannot be tolerated or trivialized by the courts. “The actions were ignoble and the Court expresses its indignation over these actions. One can understand that the woman, who is only 20 years old, feels betrayed and humiliated,” said Justice Borenstein in J.G. c. M.B., 2009 QCCS 2765

The Court issued a publication order that forbids media from identifying the parties in order not to aggravate the harm she has suffered.

Judge Borenstein barred the man from communicating, distributing, publishing, reproducing, or transmitting pictures, e-mails or videos of the filmed events as well as prohibited him from reaching her in any way. Further, the Court prohibited him from having in his possession photographs and videos of the plaintiff.

He was also ordered to pay for costs stemming from an Anton Piller order that was issued. An Anton Piller order is a court order that provides the right to search premises and seize evidence without prior warning.

A Quebecer who filmed his sexual escapades with a 20-year old woman and then distributed it on the Internet was condemned to pay $39,000 in damages.In a brief four-page ruling, Quebec Superior Court Judge Sylviane Borenstein held that the man breached her fundamental rights by intentionally and illicitly invading her privacy, and that his conduct cannot be tolerated or trivialized by the courts. “The actions were ignoble and the Court expresses its indignation over these actions. One can understand that the woman, who is only 20 years old, feels betrayed and humiliated.”

The Court issued a publication order that forbids media from identifying the parties in order not to aggravate the harm she has suffered.

Judge Borenstein barred the man from communicating, distributing, publishing, reproducing, or transmitting pictures, e-mails or videos of the filmed events as well as prohibited him from reaching her in any way. Further, the Court prohibited him from having in his possession photographs and videos of the plaintiff.

He was also ordered to pay for costs stemming from an Anton Piller order that was issued. An Anton Piller order is a court order that provides the right to search premises and seize evidence without prior warning.

Canada’s longest trial again in the news

Nearly 15 months after the Quebec Court of Appeal griped about the legal war of attrition that has lasted more than a decade in the case against a former accounting giant and its partners over the infamous collapse of Montreal real-estate firm Castor Holdings Inc., the highest court of the province recently dismissed yet another appeal.

The defendants sought to appeal an interlocutory judgment that dismissed their motion to obtain an additional $17-million in payment bonds from the respondents, and declare them to be jointly and severally liable of costs. Judge Lise Côté of the Quebec Court of Appeal upheld the lower court ruling.

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Blogger condemned to pay $125,000 for defamation

An exiled Senegalese journalist, now residing in Montreal, has been ordered to pay the son of the president of the Republic of Senegal $125,000 for defaming him in a blog widely republished by African media outlets.

In a blog run by the well-respected French-based publication Nouvel Observateur, Souleymane Jules Diop portrayed Karim Meïssa Wade, in a series of postings that were published between July and November 2005, as a criminal who appropriated or diverted public funds, was involved in money-laundering, and resorted to threats and physical intimidation.

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Sudoku will is valid, rules court

During the Christmas holidays Fernande Aubé, while suffering from the ravages of cancer, kept herself busy playing Sudoku as she lay in a hospital bed in Hull, Quebec. The former teacher also lined several of the pages of the puzzle book with her last will and testament, with instructions that had changed the notarized will she had signed in 1991.

“Please accept my apologies with all the paperwork I have left you,” wrote Aubé, who gave the document to a nurse with instructions to pass it on to Aubé’s daughter Gina before she passed away on Christmas Eve in 2007. “I have been thinking of doing it for months but destiny was quicker than me.”

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