Ex-Aston Hill sales manager settles Amaya insider trading case

The former national sales manager at Aston Hill Financial was handed a two-year trading ban, and ordered to pay penalties and disgorgement totalling $11,000, to settle insider tipping and trading allegations with Ontario regulators in a case that involves online gambling firm Amaya Inc.

As part of the settlement agreement approved Tuesday by the Ontario Securities Commission, John David Rothstein agreed to co-operate with OSC staff in the regulator’s “investigation into illegal insider trading and tipping in securities of Amaya.” This could include testifying as a witness “in any proceedings commenced or continued,” according to the settlement documents.

Rothstein was named in a statement of allegations issued by the OSC last week alongside two other former senior executives at Aston Hill, former co-chief investment officer Ben Cheng and former chief executive Eric Tremblay. Former CIBC Wood Gundy adviser Frank Soave was also named. None of the allegations have been proven.

According to an agreed statement of facts in Rothstein’s settlement with OSC staff, he was not aware there was a non-disclosure agreement signed on behalf of Aston Hill — or that two funds managed by Cheng, his superior, had agreed to participate in financing a $4-billion acquisition by Amaya — when Cheng told him material facts about the pending acquisition in June 2014.

Cheng allegedly told Rothstein he should “inform others, who had lost money on certain other investments promoted by AHF (Aston Hill) … about the Acquisition before it was announced,” according to the settlement document, which says Rothstein told Soave.

According to OSC staff, both Soave and Rothstein bought Amaya shares before it was announced Amaya would acquire Oldford Group Ltd. for US$4 billion. Rothstein’s profit was $5,500, which he was ordered to disgorge as part of his settlement. He was also ordered to pay an administrative penalty of $5,500.

OSC staff said Rothstein was granted “substantial credit for cooperation.” In addition, regulators did not oppose “mitigating circumstances,” including the fact that he supports his family financially and had not been in trouble with regulators before.

The settlement documents note that Rothstein lost his job as a result of the investigation.