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Lawyer pleads guilty to $9M insider trading scheme – Yahoo! Canada News
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Wed Oct 28, 6:58 AM
A former Toronto lawyer has pleaded guilty in an insider trading scheme that the Ontario Securities Commission alleges netted the man and his partner more than $9 million US over 14 years.
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Stanko Joseph Grmovsek entered his plea Tuesday in a Toronto courtroom. The insider trading and fraud charges were brought forward by the RCMP.
According to the OSC, Grmovsek and law school classmate Gil I. Cornblum exchanged confidential information on numerous corporate transactions between 1994 and 2008.
In the plan, Cornblum would use his position as a lawyer to seek out confidential information on numerous companies and transmit it to Grmovsek, “for sole the purpose of [trading in securities] by Grmovsek for a profit,” the OSC’s statement of allegations in the matter reads.
The pair tried to disguise their activities by using numerous brokerage accounts in the Bahamas before repatriating their illicit profits back into Canada, the regulator says. In total, Cornblum tipped Grmovsek to material in advance of news releases on 46 separate publicly traded companies.
Cornblum was a mergers and acquisitions lawyer at numerous prestigious law firms in Toronto and New York until he was terminated in 2008. Grmovsek was a practising lawyer until 1997, “when he ceased practising law and engaged in the illegal insider trading scheme full-time,” the OSC says.
According to media reports, Cornblum was found dead early Monday morning below a bridge in the Don Valley in Toronto. He was rushed to hospital but later died.
As part of the agreement with the OSC, Grmovsek has been ordered to disgorge all profits obtained in the scheme, and will be permanently prohibited from buying or selling securities or acting as a director or officer at any registered firms.
He has yet to be sentenced on the criminal charges to which he has pleaded guilty, but such charges in Canada can garner sentences of 10 years in prison.
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