Jan 30 (Reuters) - The first published word on a sharp dividend cut by Canadian Oil Sands Ltd on Thursday took not only investors by surprise, but the company too, and thousands of trades were reversed on Friday as a result.
Canadian Oil Sands is the biggest stakeholder in the Syncrude Canada oil sands project in northern Alberta. It was caught off guard after the Toronto Stock Exchange inadvertently published news before the market close and before the company had released the information on Thursday that it would cut its dividend to 5 Canadian cents from 20 Canadian cents.
“They made a mistake,” said company spokeswoman Siren Fisekci. “The practice is always that you give them the dividend you’re announcing and you give them the preview of your release, and then we get their approval that we’re OK to go, and then we release it to the wire.”
Carolyn Quick, spokeswoman for TMX Group, the Toronto Stock Exchange’s parent company, said the exchange doesn’t review or approve company releases before issue. That is the role of a separate self-regulatory body, the Investment Industry Regulatory Organization of Canada (IIROC), she said.
IIROC said on Friday that it had canceled all 14,793 trades in the stock executed after 1:04:56 p.m. (1805 GMT), the exact time the material information was published on the exchange’s “Trader Notes” notification system.
TMX and the Ontario Securities Commission both said they are investigating the incident.
The shares began tumbling at about 2:50 p.m. (1950 GMT) on Thursday before being halted 20 minutes later. By then they had tumbled 7.1 percent.
Canadian Oil Sands included news of the cut when it released its fourth-quarter earnings report a half hour after the market closed.
The stock shot up 20 percent to C$7.85 on Friday, closing higher than it had been in the two days before its earnings release. (Reporting by Alastair Sharp in Toronto and Scott Haggett in Calgary; Editing by Peter Galloway)