TerraVest Industries Inc. shares experienced their steepest decline since 2009 following allegations that its executive chairman engaged in insider tipping. The news wiped out approximately $1.3 billion in stock market value when shares plunged 40% on Friday, before paring losses to 26% as of 1:21 p.m. in Toronto.
Allegations of Insider Tipping
The Journal de Montreal reported that Charles Pellerin helped family members and acquaintances make illicit gains by communicating privileged information ahead of a deal in March 2025. The news outlet cited a copy of a search warrant from Quebec's financial regulator, the Autorité des Marchés Financiers (AMF).
Background on the Deal
TerraVest, an Alberta-based manufacturer of fuel storage tanks, announced on March 17, 2025, that it would acquire U.S. transportation equipment manufacturer EnTrans International. This was the firm's largest acquisition to date. On the announcement day, shares jumped 20.5%.
Details of the Alleged Scheme
According to the Journal, the AMF stated that Pellerin, a Quebec resident, was aware of the transaction from December 12, 2024. Several individuals with ties to him made trades involving TerraVest's stock, generally within minutes of communicating with Pellerin. The transactions differed from the individuals' usual trading habits and provided a total theoretical profit of nearly $6.8 million.
Company Response
In a statement, TerraVest said: "The company takes these allegations seriously. After consultation with its legal advisors, the board of directors (excluding Mr. Pellerin) is undertaking a process to review these allegations."
Institutional Investor
Fidelity is TerraVest's largest institutional shareholder, according to data compiled by Bloomberg.
