Lenko settles over insider trading allegations

The Alberta Securities Commission has reached a settlement with Charles Lenko and his Calgary company Kylskap Creek Holdings Ltd. in relation to insider trading allegations.

Under the settlement agreement, Lenko and his company admitting to breaching Alberta securities laws when Lenko caused his company to purchase 20,000 shares of oil and gas company Profound Energy Inc. with knowledge not generally disclosed that his employer, Paramount Energy Trust, was in talks to acquire Profound Energy.

The settlement requires Lenko and Kylskap to pay the commission $15,600 to settle the allegations and contribute a further $4,750 towards costs. Lenko and Kylskap also agreed to cease trading in or purchasing securities for a period of two years.

The commission said Kylskap Creek realized a profit of $10,400 when it sold its Profound Energy shares four days after a news release announced the acquisition of Profound Energy by Paramount Energy Trust.

According to the settlement agreement, Lenko was the sole director and shareholder of Kylskap. It also described Lenko as an Alberta resident, who began working for Paramount as an evaluations engineer in December 2008. He was later promoted to become manager of mergers and acquisitions.

In that role, Lenko led a team that conducted business valuations on oil and gas companies that were potential acquisition targets for Paramount.

News of the settlement comes just weeks after Paramount Energy Trust completed a conversion to become Perpetual Energy Inc. (TSX: T. PMT, Stock Forum). Under a plan of arrangement, unitholders of the trust received shares of Perpetual in exchange for the cancellation of their trust units.

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This entry was posted on Thursday, July 8th, 2010 at 10:20 pm and is filed under Insider Trading. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.