Calvalley CEO faces insider trading charges

Mon May 14, 2012 4:17pm EDT
 
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CALGARY, Alberta (Reuters) - Securities regulators have charged the chief executive of Calvalley Petroleum Inc with insider trading, expanding a case that began last year involving the small Canadian-based oil explorer's former president.

The Alberta Securities Commission alleges Calvalley CEO Edmund Shimoon authorized or directed the company to buy its own shares when it had undisclosed material information about a reserve evaluation, the commission said in a statement.

The commission also alleges Shimoon provided undisclosed information and made "prohibited representations" to an investor, misled the company board and also misled the ASC in its investigation.

Shimoon and other officials at Calvalley were not immediately available for comment. The company is known for oil exploration operations in Yemen and Ethiopia.

The allegations against Shimoon are in addition to those filed last year against Memet Kont, Calvalley's former president and chief operating officer. The ASC alleges Kont also provided undisclosed information and also made representations to an investor about the reserve evaluation. He resigned in May 2011.

"Shimoon and Kont are alleged to have met with an investor several weeks before the release of a report that would show significant increases in Calvalley Petroleum's oil reserves, indicating that the value of Calvalley Petroleum shares should rise substantially when the report was released," the ASC said in a statement.

A hearing into the case is set to start September 13. The initial notice named Kont, Kevin MacArthur and Calvalley for trading in the company's securities before the reserve report was released.

Calvalley shares were up 1 Canadian cent at C$1.76 on the Toronto Stock Exchange on Monday.

($1=$1.00 Canadian)

(Reporting by Jeffrey Jones; Editing by Peter Galloway)