Velan deal disclosures bring separate penalties for executive and investor

Quebec’s financial-markets tribunal has imposed a $50,000 administrative penalty on a Velan executive who unintentionally conveyed privileged information about an impending transaction, while ordering the investor who traded on it to pay a $61,658 penalty and surrender $30,829 in profits.

Administrative Judge Antonietta Melchiorre approved separate settlements in the same proceeding on October 1, 2026: Autorité des marchés financiers c. Idelson Turner, 2026 QCTMF 68, and Autorité des marchés financiers c. Finn, 2026 QCTMF 69. Both decisions impose time-limited market restrictions with exceptions. They distinguish the inadvertent communication of non-public information from the intentional trading that followed.

Comments about an imminent transaction

At the time of the events, Liam Idelson Turner had worked for Velan since 2019 as its senior director of legal services and export compliance. He had known Steven Finn for more than a decade, and the two had business dealings together. Idelson Turner knew Finn was an active stock-market participant who personally managed his trading and knew his position at Velan.

During conversations on January 16 and February 8, 2023, Idelson Turner said he was working intensively on a major file and an important, imminent transaction. He was indirectly referring to the acquisition of Velan by Flowserve Corporation, which was announced on February 10. According to the admitted facts, the information was not public and could affect a reasonable investor’s decision. His conduct and enthusiasm unintentionally conveyed that it was a good time to trade Velan shares.

Finn understood the comments as signalling an opportunity to buy. He placed an order for 2,400 shares on January 16 in his personal brokerage account and another for 2,121 shares on February 8 in his company’s account. The first purchase was his first Velan transaction in either account since their respective openings. After the announcement, the share price closed at $12.73, an 89 per cent increase from the preceding day, the reasons record.

Finn sold the corporate account’s shares on March 16 and the personal account’s shares on March 17. The tribunal treated the two purchases and two sales as four breaches. Its order requires him to surrender $30,829 obtained through the misconduct, separately from the administrative penalty.

Different prohibitions, shared information

The decisions apply different provisions of Quebec’s Securities Act. Idelson Turner admitted breaching the prohibition against communicating privileged information under section 188, extended to him by section 189(4) because he obtained the information through his work for the reporting issuer. He acknowledged that acting by mistake was not a valid defence in the circumstances. The tribunal accepted his admissions as establishing the breaches even though he had not intended to communicate the information.

Finn admitted breaching the trading prohibition in section 187, extended by section 189(5). He knew the information came from someone who possessed it through his work for Velan. His liability therefore did not depend on holding Idelson Turner’s position at the company: it arose from trading while possessing information received from a source covered by the statute.

The Autorité des marchés financiers had commenced the proceeding in December 2024. The parties later asked the tribunal to approve their agreements, which contained admissions, proposed measures and undertakings. Melchiorre explained that approval under section 97 of the Act respecting the regulation of the financial sector requires an agreement to comply with the law. The public-interest assessment addresses the established breaches, the tribunal’s authority to impose the proposed measures and whether those measures advance the legislation’s objectives. Although settlements assist the justice system, the tribunal is not bound to accept a joint proposal.

Serious breaches, different mitigating factors

Melchiorre emphasized the seriousness of misconduct involving privileged information because it undermines confidence in markets that depend on participants trading with the same available information. The tribunal described its orders as regulatory, protective and preventive, rather than punishment or compensation for investor losses. Deterrence remained an important consideration.

For Idelson Turner, the tribunal weighed two communications over a short period against his lack of intention, absence of prior financial-sector breaches and lack of personal profit. It nevertheless found he should have exercised substantial caution given his responsibilities at Velan and his relationship with Finn. His admissions and acceptance of the measures demonstrated remorse; the tribunal assessed his risk of repeating the misconduct as low in light of the consequences of the proceeding.

Finn’s experience and intentional conduct weighed differently. The tribunal noted his regular participation in financial markets, the four transactions and his personal enrichment. It also considered his lack of prior breaches, cooperation with the investigation and subsequent proceedings, and remorse demonstrated by his admissions and acceptance of the proposed measures. It concluded that each settlement was proportionate and sufficiently protective and dissuasive.

Payment terms and carefully defined restrictions

Idelson Turner’s $50,000 penalty is payable in two parts under his agreement: $30,000 within five business days of the decision and the remaining $20,000 within 36 months. The order bars him from acting as a director of a Quebec reporting issuer, an adviser or an investment fund manager for 12 months, and from acting as an officer of those entities for 18 months. The operative officer restriction expressly excepts the positions of secretary and assistant secretary of an issuer, whether or not it is a reporting issuer.

His three-year restriction on securities and derivatives transactions also has defined exceptions. It permits securities trading for specified registered retirement savings, retirement income, education savings, disability savings and tax-free savings accounts in which he, his spouse or his children are the sole or joint legal and beneficial owners. It also permits trading in the private company Curemark LLC, in which he had invested through Curemark Friends LLC. These exceptions mean the order is not an unrestricted ban on every investment activity.

Finn must pay the $61,658 penalty and surrender $30,829 to the AMF in 12 monthly instalments by postdated cheques, with the first due within 15 days of the decision. His agreement provides that failure to honour the payment undertaking makes the outstanding sums immediately due. The disgorgement obligation is additional to the penalty, not part of it.

Finn is also prohibited for three years from acting as a director or officer of a reporting issuer, an adviser or an investment fund manager. His 30-month securities and derivatives trading restriction allows transactions through a dealer representative duly registered with the AMF, provided he has given the representative written instructions and the decision, and has supplied the representative’s name to the AMF beforehand.

Both agreements contain waivers of appeal and judicial review. The decisions establish the measures and payment obligations; they do not establish that payments have been made. Together, they show how inadvertence can fail to defeat a disclosure breach while still influencing the tribunal’s choice of protective measures, and how a recipient’s knowing use of the information attracts a distinct trading finding and surrender of profits.