Independent Counsel Concludes Pretivm-Initiated Investigation
March 21 2019 - 5:03PM
Independent Counsel Concludes Pretivm-Initiated Investigation
Pretium Resources Inc. (TSX/NYSE:PVG) (“Pretivm” or the “Company”)
reports that independent legal counsel and a consultant retained to
investigate recent trading in its shares have reached two clear,
main conclusions. First, the investigation found no evidence
of an information leak by the Company. Second, there is evidence of
instances of market manipulation in trading of Pretivm shares by an
outside party or parties. The findings of the investigation,
summarized below, have been turned over to the US and Canadian
securities regulators for possible further action relating to the
evidence of market manipulation.
Pretivm initiated the external investigation
into unusual trading of its shares
Pretivm engaged independent legal counsel to
examine unusual trading activity in its shares leading up to its
news release dated January 9, 2019. The investigation comprised an
examination of a) Pretivm’s internal and external communications,
and b) trading in Pretivm common shares and derivatives.
Independent legal counsel was provided with complete and
unrestricted access to all Pretivm internal and external
communications for the review.
No evidence of information leaks from
Company
The independent investigation of Pretivm’s
communications found no evidence of a leak of confidential
information to market participants. In addition, Pretivm’s
disclosure policies and procedures were reviewed and found to be
compliant with all applicable laws and in conformance with best
practices. As a result of the investigation, the independent
legal counsel recommended minor revisions to the Company’s policies
and procedures. These recommendations have been adopted by
the Company.
Evidence of market manipulation through
abnormal, high volume sell-side common share order cancellation
during trading; sharp rise in open interest of short-dated put
options leading up to September 6, 2018
As part of the investigation, the independent
counsel retained a consultant to examine the trading in Pretivm’s
shares and derivatives leading up to Pretivm’s January 9, 2019 news
release, and additionally for trading leading up to and including
September 6, 2018 when Pretivm’s share price decreased sharply. In
the opinion of the independent consultant, there is evidence of
market manipulation in trading of Pretivm shares based on a review
of executed, created, cancelled and outstanding sell orders in
Pretivm’s shares during both periods of review. In analyzing
trading in Pretivm’s shares, the consultant identified an unusually
high volume of odd-lot orders, and patterns of massive blocks of
sell orders created and cancelled in rapid succession (within the
same second) below and above the best offer. In one key
finding in respect of the abnormal volume of order cancellations,
on September 6, 2018 sell orders for over 700,000 PVG shares were
created and cancelled within the two, one-minute intervals between
11:45 AM and 11:47 AM EST. (By way of comparison, sell orders for
an average of 4,297 PVG shares were created and cancelled for each
minute of trading between July 1 and July 31, 2018.)
In reviewing PVG option trading from August 1,
2018 through to September 5, 2018, the consultant identified an
unusually sharp rise in both the put-to-call ratio and short-dated
put to long-dated put ratio leading up to the share price drop on
September 6, 2018.
Reports forwarded to US and Canadian securities
regulators for possible further action
The independent legal counsel retained by
Pretivm has completed its investigation into the trading of Pretivm
shares, and has forwarded all reports to US and Canadian securities
regulators. Pretivm will cooperate with the securities
regulators to its fullest extent in their review of trading in
shares of Pretivm.
About Pretivm
Pretivm is a low-cost intermediate gold producer
with the high-grade underground Brucejack Mine in northern British
Columbia.
For further information contact:
Joseph Ovsenek |
Troy Shultz |
President & CEO |
Manager, Investor Relations
& Corporate Communications |
|
|
Pretium Resources Inc. Suite 2300, Four Bentall Centre, 1055
Dunsmuir Street PO Box 49334 Vancouver, BC V7X 1L4 (604) 558-1784
invest@pretivm.com (SEDAR filings: Pretium Resources Inc.)
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