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ATI settles financial misconduct claims

Ontario Securities Commission handed large-ish cheque

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ATI has agreed to cough up CAD900,000 ($743,000) to the Ontario Securities Commission to settle allegations that it failed to disclose key financial performance information and made "misleading statements" to the Commission.

The payment, agreed at an OSC hearing in Toronto yesterday, will see ATI pay CAD400,000 to cover the costs incurred by the OSC during its five-year probe into the company and a further CAD500,000 in punitive damages.

"We are pleased to put the matter behind us," ATI said in a statement. The company also agreed to institute new procedures on trading shares and corporate governance.

The case goes back to April 2000, when the OSC began investigating claims that ATI had withheld from investors revelations of lower-than-expected revenue and earnings for Q3 FY2000. It was also alleged that a number of ATI executives profited from that failure to disclose by selling shares at a price above that which the shares would have commanded had ATI issued a profit warning for the quarter.

That alert did not come until 24 May 2000.

In January 2003, the OSC formally stated its allegations against ATI; company chairman Kwok Yuen Ho and his wife, Betty; the company's head of investor relations, Jo-Anne Chang, and her husband, David Stone; marketing admin manager Mary de la Torre and her husband, Alan Rae; and ATI general counsel Sally Daub. The named executives held their postions during the crucial period 1 September 1999 and 31 August 2000.

The OSC was also due to hear yesterday a proposed settlement with de la Torre and Rae. The outcome of the hearing has not yet been made public. Today, hearings will open to probe the allegations made against the remaining executives and their partners.

Daub, accused of lying to OSC investigators, reached a settlement with the Commission on 14 December 2004. She agreed to pay CAD5000 to cover costs. ®

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