N.L. files insider trading complaint over FPI sell-off

The Newfoundland and Labrador government has filed an insider trading complaint aboutsales of Fishery Products International stock by a former senior company official.

CBC News has learned the provincial government has asked security regulators to investigate a major sell-off of FPI stock.

The sell-off involves George Armoyan, a former company director.

Deputy Premier Tom Rideout said the government noticed in late March and early April there had been unusual stock market activity involving St. John's-based FPI, which subsequently reached tentative deals to sell most of its assets.

During that period, the company's stock price was soaring, as investors kept an eye on FPI's efforts to find buyers for its Newfoundland plants and trawlers and its U.S. marketing division.

"FPI had issued a blackout on insider trading," Rideout said.

"What made us do it was the indications from sources that— despite a blackout on insider trading— insider trading was in fact taking place," Rideout said.

In the span of four weeks, Armoyan sold 1.2 million shares at a profit of more than $10 million.

Armoyan, a Halifax-based businessman, took on a leadership role in FPI, and for a time was one of three directors that made most of the major decisions at FPI.

All trading properly reported: FPI official

During the time that Armoyan sold his shares, he was still considered an insider at FPI and would have been intimately familiar with negotiations to sell almost all of the company's key assets.

"Mr. Armoyan, you know, was— on our view at least— was flaunting the fact that he was trading anyway," Rideout said.

An FPI official said all trading was properly reported to authorities at the Toronto Stock Exchange, and that there has never been any indication that any rules were broken.

Russ Carrigan, a spokesman for FPI, told CBC News onFriday that a matter such as a blackout is "an internal matter," and that no investigation is underway.

"I'm not going to confirm or deny that," Carrigan said, when asked whether a blackout on insider trading was in place, as Rideout insisted.

"I'm not going to talk about it."

In April, Armoyan resigned as a director at FPI. He said last month that he sold his shares because he was tired of government meddling in the company.

On Friday, in reports published by the Globe and Mail, Armoyan blasted the provincial government, calling the allegations "politically motivated."

The provincial government, through the FPI Act, retains some control over how the former Crown corporation can be managed. It is currently battling the federal government over the province's insistence that it take control of FPI's groundfish quotas, beforehaving them transferred to another company.

FPI has made a tentative deal to sell most of its Newfoundland assets to Ocean Choice International, and its secondary processing plant in Burin to High Liner Foods.