Jan. 7, 2005. 01:00 AM
|$8.5 million lawsuit settled, Orion says|
|Ex-officer alleged insider trading|
|'We didn't want this to keep going'|
Bay Street's Orion Securities Inc. has reached a settlement with a former senior executive who sued the securities firm for $8.5 million for wrongful dismissal.
In his statement of claim filed in Ontario Superior Court in September, Peter Misek claimed that Orion used insider information and dumped shares of a high-flying biotech company shortly before the firm publicly announced negative results of a drug trial.
Orion has denied Misek's allegations. Orion chairman John Varghese confirmed the lawsuit had been settled, but wouldn't disclose terms.
"At the end of the day, we didn't want this to keep going," Varghese said. "Peter apologized for harm these allegations have caused Orion and its senior officers."
Misek said he was "pleased to get this over with and I want to get on with my life."
He said that Orion had pledged to indemnify him, or protect him, against any future securities-related lawsuits from the time he started at the company until the settlement was signed.
Misek's lawsuit was the latest controversy to engulf the securities firm, formerly known as Yorkton Securities Inc.
Yorkton Securities paid a $1.25 million fine to regulators to settle high-profile insider trading allegations involving former chief executive Scott Paterson and others.
Misek alleged in his lawsuit Orion had sold all of its holdings in ConjuChem Inc. prior to the release of trial results.
Misek said in his court filing that an Orion official knew ConjuChem, whose shares skyrocketed 143 per cent in the first six months of 2004, was about to release negative trial results for its experimental diabetes drug.
The company's stock, which had traded as high as $14.90, fell as low as $2.80 in the wake of the drug trial results.
Misek said he was suspicious of the timing and notified the company's internal compliance officer to investigate the sale.
That's when Misek alleged his relationships within the company began to crumble.