Why don't cabinet ministers need to disclose share transactions?
On Thursday, CTV News asked INK Research CEO Ted Dixon about insider trading in Morneau Shepell stock back in November and December 2015. While the discussion Thursday centred on stock trading by the Finance Minister and his father, there is another important issue at stake that has yet to receive attention. Specifically, why are federal cabinet minister not required to report sales and purchases of shares and other securities in the public market like Members of Congress are required to do in the United States?
Instead, in Canada we are left guessing. On December 1, 2015, INK Research published its regular Company Report for Morneau Shepell (MSI) which registered users can download for free to reference. In that document, we reported a TSX insider trade summary sale of 694,900 Morneau Shepell shares. However, there has not been a subsequent SEDI filing to match those trades that we can identify. Consequently, we are left guessing as to who pulled the trigger. Was it a large fund that was marked in error, or was it possibly a former insider who had yet to be removed from the marking system? (To learn more about TSX insider markers, read our FAQ#3 and #4.) As of November 30, 2015, the Finance Minister was a former insider of the company.
The question of whether it was the Finance Minister who made those trades would have been easily answered had a modern disclosure system for cabinet ministers been in place. We would suggest that everyone, including Mr. Morneau, would be better off today if such a system were in place. Ottawa needs to quickly move to improve the transparency of cabinet minister personal financial dealings as a matter of good public policy.
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