This appeal concerns the interpretation and application of section 76(5)(e) of the Securities Act regarding insider trading and tipping liability for successive tippees.
The appellants received material non-public information about a takeover bid for Masonite International Corporation through a chain of tippers.
The core issue is whether successive tippees who did not have actual knowledge that their source was in a special relationship with the issuer "ought reasonably to have known" this fact.
The Court of Appeal upheld the Ontario Securities Commission's findings against Miller but reversed the Divisional Court's decision to overturn findings against Cheng, restoring the OSC's liability and sanctions determinations.
