Lionel Ettedgui, the former president and CEO of food retailer Colabor, only held his post for a year and a half, but that was enough for the Autorité des marchés financiers (AMF) to launch an investigation into his subject for insider trading.
The AMF suspects Lionel Ettedgui of having “leaked” information to two people he knows well shortly before his departure from the company, announced on Monday August 19, 2019, reveals a judgment of the Superior Court rendered Thursday.
A four times higher volume of transactions on the title of Colabor on the Toronto Stock Exchange three days before his resignation has put the chip in the ears of the authorities.
Courtesy photo
The Boucherville facilities of the food distributor Colabor.
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According to allegations in support of an AMF search, Mr. Ettedgui would have warned Gérard Leclerc and Alain Bracchi that his departure would cause the title to fall, and the two men would have avoided losses of $ 85,700 and 10,250 $ by getting rid of their shares.
It was the seizure of Lionel Ettedgui’s iPhone, obtained thanks to the search warrant, which allowed AMF investigators to identify the two men. Mr. Leclerc is Managing Director of Viandes Lauzon, which is owned by Colabor. Mr. Bracchi founded a frozen dessert company with Lionel Ettedgui in 2006.
The AMF did not want to comment on the file on Thursday because “it is still under investigation”. Neither Mr. Ettedgui nor MM. Leclerc and Bracchi did not respond to our interview requests.
An old food truck
Lionel Ettedgui has been working in the food industry for many years. Before landing at the head of Colabor, he made a stint at Saputo, among others.
The decision rendered Thursday by a judge of the Superior Court of Quebec specifically concerns his iPhone seized by the AMF. The ex-boss of Colabor wanted it to be combed through by a third party, not the agency’s investigators, in order to protect his privacy.
He obtained the keeping under seal of the telephone until a next hearing. Note, however, that Mr. Ettedgui “does not dispute the issuance of the search warrant”, we can read in the judgment.
Prior to his resignation in August 2019, Colabor’s stock was close to $ 1 on the TSX.
The action took a hit
His departure coincided with the stock falling by about 30%, reaching a low of $ 0.64 a few days later.
Colabor stock ended Thursday at $ 0.83, with a market value of $ 85 million.
The Boucherville company has more than 1,200 employees.
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