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Corel chief charged with insider dealing

Cowpland fights to clear his name after offloading shares

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Corel saw its CEO Michael Cowpland charged with insider dealing yesterday. The Ontario Securities Commission (OSC) charged the head of the Canadian software vendor with three counts of violating the Securities Act. It also laid one count against Cowpland's personal holding company, MCJC Holdings. Cowpland will be in the dock at the Ontario Court of Justice on 22 November, and if found guilty faces porridge or a hefty pay out. The maximum penalty is two years in jail, a C$1 million (£604,780) fine and three times any profits made from the dealings. Cowpland is charged with acting on information not available to the public. Part of his predicament springs from him selling a third of his Corel shares in 1997 for C$20.5 million, weeks before the company's $32 million third quarter loss report sent its share price plummeting by 40 per cent. Trading in Corel shares was halted on Nasdaq and the Toronto Stock Exchange before the announcement. Stock will resume trading today, though is expected to take a beating. Cowpland denied he had violated securities laws, saying he had offloaded the shares to pay off personal loans. "I am looking forward to finally having a chance to clear my name by responding to these matters, which are now more than two years old," he said. Analysts said the charges may prompt a call for Cowpland's resignation from Corel. But the charges will not be easy to prove. Duncan Stewart, fund manager at Tera Capital in Toronto, said: "Making the allegations is easy, proving them is, in all cases, unless people are genuine dunderheads, almost impossible. "Very few people write memos to themselves saying: 'Did insider trading today' and then mail them to the OSC." ®

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