by Anton Shilov
01/23/2003 | 01:18 PM
The CEO and Chairman of ATI Technologies, Mr. K.Y. Ho, his spouse and four other former employees of the Markham, Ontario-based graphics and multimedia solutions developer were accused of illegal insider trading in late April 2000 by Ontario Securities Commission last week. In the worst case, if allegations are proven, the co-founder of ATI may loose his CEO position in the company, moreover, it could open ATI up to class-action lawsuits from all, who purchased ATI’s shares before May 24 2000.
OSC supposes that Ho and other insiders from ATI Technologies knew that the company would miss its financial guidance on May 24, but unveiled this fact only on the mentioned date, having sold or donated parts of the their stock in late April in order to avoid losses. The commission said that the activities brought more than $5.2 million in profits or avoided losses and triggered significant tax benefits.<%BANNER[article]%>
In late April 2000 one ATI’s stock cost from $18.00 to $19.69, while on the 20th of May 2000 the price of one share tumbled from $16.75 to $10.00 in one moment. Ho is accused of selling 240,900 ATI shares from an account in his wife's name before the profit warning, receiving total proceeds of $4.6 million, about $2.2 million more than the shares were worth after the profit warning. The commission also alleges Ho and his wife donated 254,000 shares to charities before the profit warning, getting a higher tax benefit before the shares declined.
An Ontario Securities Commission hearing in the case was scheduled for February 14, 2002. ATI Technologies representatives said that the company takes all the allegations seriously.