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OSC bans, fines former WeedMD chairman Kraft

2024-07-09 19:20 ET - Street Wire

Also Street Wire (C-ENTG) Entourage Health Corp

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by Mike Caswell

The Ontario Securities Commission has banned and fined former WeedMD Inc. chairman Michael Kraft and an associate, Michael Stein, for insider trading. The OSC claimed that Mr. Kraft tipped Mr. Stein about a deal in which WeedMD planned to expand its cannabis operations in 2017. The agreement saw WeedMD enter into a "transformational expansion" in which it leased five acres of greenhouse space.

The penalties for Mr. Kraft, 60, and Mr. Stein, 64, are contained in an order that the OSC released on July 2, 2024. The regulator has banned Mr. Kraft from trading for three years and from serving as an officer or director for four years. He must also pay a $200,000 fine and $150,000 in hearing costs. Mr. Stein is banned from trading for four years and from serving as an officer and director for three years. He must pay a $150,000 fine, $50,000 in costs and $29,345 representing his gains.

The events at issue go back to November, 2017, when WeedMD was looking to expand its greenhouse space. The company had a proposed deal to lease five acres at a site in Strathroy, a small Ontario community west of London. The lease was significant to WeedMD, as it would expand the company's annual cannabis production to 21,000 kilograms, up from 1,200 kilograms.

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In my opinion, the tipping charges against Kraft are complete bull. Tipping is a whisper to a friend, not a lengthy email exchange with contracts and drafts of press releases plus multiple phone calls. Kraft appeared to only be looking for Stein's input on the transaction, as he probably did many times before. Stein was not just Kraft's friend, but a lawyer and longtime business associate. Stein's insider trading is another matter altogether. He broke insider trading rules and has no viable excuse for his actions. He should have known better and should be punished. For Kraft to get fined more for his actions is absolutely ridiculous. The OSC got this wrong. End of rant.

Posted by reality check at 2024-07-10 09:27

Timely disclosure. B S lawyers always say don't say anything, but, as soon as negotiations start should be a news release, then no one gets a zz f ked by advertent or inadvertent whispers....this timely disclosure issue is the problem with the current market... no news to the public means nothing happening... surely each day all these zombie deals have something they working on... phone calls to the phne list telling it whats happening is actually tipping...news release reaches more people and is disclosure and real interest can be garnered...

menawhile with WEED, non of those "..going to be first $100 pot deal..." postings by marketing department and official promoters has gone untouched...

Posted by oh at 2024-07-10 13:45