Sino-Forest Hearing Set in Canada on Lifting of Trade Halt for Put Options
The Ontario Securities Commission will hold a hearing this week to consider modifying a temporary cease-trade order on the Canadian shares of Sino-Forest Corp. (TRE.TO) to allow the trading of some outstanding put options, Bloomberg reported.
The Canadian Derivatives Clearing Corp. will petition the agency tomorrow to allow the trading of put contracts linked to Sino-Forest shares, Canada's main securities watchdog said yesterday in a notice on its website. A put is an agreement that gives the holder the right to sell a security for a certain amount by a set date.
In an order last week, the Toronto-based commission extended a trading ban on Sino-Forest shares to Jan. 25 as it investigates allegations of fraud at the Chinese tree-plantation operator. The OSC ordered the cease-trade order on Aug. 26 and said that officers and directors of Hong Kong- and Mississauga, Ontario-based Sino-Forest may have engaged in acts "related to its securities" that they "knew or should have known" perpetrated a fraud.
Sino-Forest's stock has plunged 74% in Toronto since June 1, the day before short seller Carson Block's Muddy Waters LLC published a report alleging that the company overstated its timber holdings. Sino-Forest has denied Muddy Waters' allegations and has assigned an independent committee to investigate the claims, hiring PricewaterhouseCoopers LLP to assist.
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