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SEC defendant Bortnovsky protests Aphria charges

2022-11-24 20:51 ET - Street Wire

Also Street Wire (C-APHA) Aphria Inc

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by Mike Caswell

Kris Bortnovsky, one of those awaiting trial in Boston for a $4-million insider trading scheme that included Ontario's Aphria Inc., has asked that the judge throw the charges out. (All figures are in U.S. dollars.) He says that there is nothing to indicate that he knew the inside information at the centre of the case was improperly obtained. As a result, the indictment against him fails to make a case for insider trading, he contends.

The request from Mr. Bortnovsky comes as part of a case in which prosecutors cited him for trades with four companies. Most of the scheme centered on Aphria, with that portion of the trading generating $2.2-million in gains, the government said. According to prosecutors, Mr. Bortnovsky learned of a planned takeover for Aphria, and then bought out-of-the-money options before the deal became public.

With the case still awaiting trial, Mr. Bortnovsky has filed a motion seeking to dismiss the charges. The motion, dated Nov. 22, 2022, stems from the way that Mr. Bortnovsky obtained inside information. Prosecutors claim that he learned of the Aphria takeover through a man named David Schottenstein, who had close contact with an insider. Mr. Schottenstein passed news of the takeover to Mr. Bortnovsky and others, allowing Mr. Bortnovsky to buy options that became considerably more valuable once news of the takeover became public.

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