EPISODE #2: CHRIS LECLAIR’S “INSIDER TRADING”

Question #2: Did Chris LeClair commit “Insider Trading” with the egaming file?

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BetterBackground

After the Auditor General made public her report Special Assignment on E-gaming, the media jumped all over her finding that two senior government officials had an appearance of “conflict of interest” in the e-gaming file: Billy Dow and Chris LeClair.

Chris LeClair was Premier Ghiz’s Chief-of-Staff from June 12, 2007 until October 17, 2011.  Following his departure from Government, LeClair formed his own private consulting company (Policy Intel); however, he continued to work on e-gaming as a private consultant with McInnes Cooper law firm.

LeClair’s involvement as a private consultant on the e-gaming file in the summer and fall of 2012 is key to understanding the full e-gaming affair, but that’s a story for another day

Meanwhile back at the Premier’s office – just days after LeClair’s departure – Ghiz ordered that all of LeClair’s emails and documents be destroyed without first copying them for the Provincial Archives (as is the law). I’ve already noted Campbell’s view on that issue in my article: “Judge Campbell’s Flawed E-gaming Ruling Throws Auditor General under the Bus  Campbell considered Ghiz’s action “standard procedure.”

It wasn’t the AG’s mandate to do anything more than draw the government’s attention to the matter of perceived “conflicts of interest”.  It was government’s duty to take the next step. The AG’s concerns didn’t go unnoticed by the media or opposition, but numerous opposition MLAs calls for disciplinary action and further legal investigation at the time were ignored by government.

The AG was aware of Chris LeClair’s relationship with Paul Jenkins who is the “local business owner” – in the following quotation from the AG – who introduced LeClair to CMT’s Vice President of Business Development at the time (Paul Maines) and the CEO of Simplex (Philip Walsh):

Chris LeClair.JPG

It was obviously this “personal” involvement that concerned the AG and offered grounds to believe LeClair relied upon insider knowledge for an investment opportunity made by his wife.

Chris LeClair was actually involved in the egaming file at least a year earlier than “early 2011.”  Consider what Gary Scales said in his sworn affidavit concerning both Chris LeClair’s and Billy Dow’s involvement in egaming  (Note: Billy Dow is with Carr, Stevenson and MacKay law firm):Gary Scales Affidavit

It was because of LeClair’s intimate involvement in the egaming/financial services platform project that the AG raised a concern about a potential “conflict of interest” and offered two paragraphs to explain the factual basis for that concern:

Chris Leclair Investment in AG report

CMT’s Claim Against LeClair and LeClair’s Response

(a) From the First CMT Statement of Claim (2015-04-09)

101. Unbeknownst to CMT, Maines or Jessop, the wife of LeClair, Christine Daprat, also purchased securities of RevTech.

(b) From the First Government Defence: (2015-04-09)

Does not respond to para 101 and is silent on the issue

(c) From the Amended Statement of Claim

86. On or about June 5, 2011, unbeknownst to Maines or Walsh, on information provided by Jenkins, LeClair used his wife’s maiden name to invest in the public company that was being targeted by CMT.

(D) From the Government Defence: (2018-04-14)

24. As to the allegations made in paragraph 86, LeClair states and the fact is, that the wife of LeClair purchased a convertible debenture in Revolution Technologies Inc. for $1,500.00, the debenture was never converted, and no financial benefit was ever received from the debenture.  LeClair otherwise denies the remainder of the allegations.

LeClair here admits to the fact that his wife purchased a convertible debenture – this was already confirmed and made public by the Auditor General –  but DENIES CMT’s claim that he obtained information about that investment opportunity from Paul Jenkins – a connection that would clearly show that LeClair did indeed obtain information about the investment opportunity as “insider” information on a file he was working on for the PEI government.

You can say pretty much anything in a Statement of Claim or Statement of Defence, but when it comes time to file affidavits you need to swear an oath that you’re telling the truth, and there are potential consequences for not telling the truth. LeClair admitted a bit more of the truth in his sworn affidavit – namely that he did obtain the information about the investment opportunity from an insider, Paul Jenkins:

LeClairs Affidavit

When LeClair was cross-examined under oath last January, he admitted a bit more of the truth when he casually stated that “we had invested” which grabbed CMT’s lawyer’s attention. The following exchange between MacDonald and LeClair then took place:

Chris Leclair cross

Judge Campbell’s Decision

Judge Campbell never mentions anything at all about the matter of Chris LeClair’s conflict of interest and insider trading. The evidence before him is the same evidence you are reading.  Nor does he mention (a) the false defence from LeClair denying knowledge that Paul Jenkins was the source of the information on the investment, (b) LeClair’s subsequent admission of that fact in his sworn affidavit, nor (c) LeClair’s admission in his sworn testimony at Cross examination that he was personally involved in the investment, not simply his wife.

Campbell does make a few comments about “conflict of interest” and quotes the Auditor General, but remains silent on the matter he was actually called upon to consider:

117    Other matters addressed by the Auditor General included the need for improved conflict of interest guidelines at the time in question. [Campbell’s Ruling].

The Truth?

Chris LeClair not only had a “conflict of interest” but committed “insider trading” while serving as Chief-of=Staff for Robert Ghiz when he obtained information from Paul Jenkins about an e-gaming investment opportunity with which he was personally involved on behalf of the PEI government.

The Consequences?

None.

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