CP Ships officers’ improper stock trades confirmed
Several senior CP Ships executives engaged in improper transactions in their company’s stock, a special committee set up by the company confirmed.
Stock market-listed company CP Ships reported Friday that a special committee comprising four independent directors found that “trading in shares of the company by certain officers in May and June should not have taken place.” These officers included Ray Miles, the chairman of CP Ships. The company has not named the other executives caught in the controversial stock trades.
After these transactions, CP Ships' stock on the New York Stock Exchange fell more than 20 percent in August after the Canadian-registered container shipping group admitted it had overstated its profits in 2002, 2003 and in the first quarter of this year.
The committee completed the previously announced investigation into stock trading activities. It looked at issues raised in an August letter from the Ontario Securities Commission concerning these stock trading activities.
The committee has requested that the individuals involved, including Miles, make “appropriate restitution to the company in respect of such trading activity,” CP Ships said in a statement.
The findings will increase pressure on CP Ships’ management, which has already had to apologize in the summer for accounting errors, and was shaken by the sudden resignation of Frank Halliwell as its chief executive officer.
CP Ships said the committee of directors “concluded that there was no intent to violate applicable securities laws.” It also noted that the trading was done openly and with required internal trading approvals.
The company exonerated Frank Halliwell, who resigned Dec. 1 as CEO, saying he did not engage in any stock trading activity in the period under investigation.
The board of CP Ships was aware of Miles’ inappropriate trading when it decided to step in as acting CEO following the resignation of Halliwell.
“The company will continue to cooperate fully with securities regulatory authorities,” CP Ships said.
On Friday, CP Ships’ stock declined 2.92 percent to $12.29 on the New York Stock Exchange after the company announced the findings of its investigating committee.