A panel of the Ontario Securities Commission (“OSC”) has dismissed allegations against Jowdat Waheed and Bruce Walter of insider trading, tipping and conduct contrary to the public interest in connection with a toehold purchase and subsequent hostile takeover bid of Baffinland Iron Mines Corporation (“Baffinland”) in a decision released on August 27, 2014. It was alleged that Waheed obtained material confidential information about a potential joint venture by Baffinland while working there as a consultant, which he passed on to Walter with whom he formed Nunavut Iron Ore Co. (“Nunavut Acquisition”). Both were alleged to have relied upon that information in launching a hostile takeover bid for Baffinland.



Waheed had worked as a consultant for Baffinland, a publicly-traded junior mining company, from February to April 2010. In August 2010, after his role as a consultant ended, Waheed formed Nunavut Acquisition with Walter.

On September 9, Nunavut Acquisition acquired a toehold stake in Baffinland with its purchase of 20 million common shares and five million warrants. OSC Staff alleged that Waheed and Walter made  the toehold purchase while in a special relationship with Baffinland and with knowledge of an advanced state of negotiations between Baffinland and ArcelorMittal S.A. (“ArcelorMittal”) regarding a potential joint venture.

On September 22, Nunavut Acquisition launched a hostile takeover bid for Baffinland. OSC Staff alleged that Nunavut Acquisition’s takeover bid was launched mere days before Baffinland and ArcelorMittal were expected to finalize their joint venture.

After the Baffinland Board of Directors employed a shareholder rights plan, ArcelorMittal launched its own takeover bid for Baffinland. Nunavut Acquisition and ArcelorMittal eventually made a successful joint bid for Baffinland in January 2011.


Following a lengthy hearing on the merits, the OSC determined that Waheed did not make or allow the purchase of a toehold position in Baffinland while in a special relationship with the company with knowledge of material facts about the status of its talks with ArcelorMittal,  or tip Walter. Though Waheed had been aware of negotiations between Baffinland and ArcelorMittal while he was a consultant, the negotiations ceased to be a material fact with the passage of time and the failure of the parties to complete a transaction. During the post-consultancy period, the evidence did not establish that Waheed was informed by anyone at Baffinland that the company was in an advanced state of negotiations with ArcelorMittal, including the provision of an August 10 term sheet, or that they had entered into a Second Exclusivity Agreement.

The OSC also declined to find that Waheed and Walter had breached the public interest provisions of s. 127 of the Ontario Securities Act.


Margot Finley

Other Author

Margot Finley


Corporate Commercial Litigation and Arbitration
Securities Litigation