As we enter April, the familiar “tax season” that is prevalent in both the US and Canada reminds me of looming deadlines. Recently, I explored the SEDI page for NioCorp, which tracks insider stock, bond, option, and warrant trades by insiders of Canadian public companies. NioCorp is a junior mining company aiming to establish a niobium mine in the US. Recently, as Otto highlighted, Tommy Humphreys’s site CEO.ca may have served as a paid promoter for NioCorp, though it wasn’t exactly a secret. A glance at the extensive disclaimers on this page shows that the main feature is just a video along with 118 words of content!
James “Casey” Forward (not to confuse him with the football player James Casey or Louis James from Casey Research) served as CFO until recently when a cryptic management change statement was released:
VANCOUVER, BRITISH COLUMBIA–(Marketwired – Apr 2, 2015) – NioCorp Developments Ltd.(“NioCorp” or the “Company“) (NB.TO)(NIOBF)(BR3.F) is pleased to provide a senior management update.
Effective immediately, Mr. Neal Shah has been appointed as the Interim Chief Financial Officer. The Company has accepted Mr. Casey Forward’s resignation as CFO following many years of service. Mr. Forward will remain with the Company during the transition period. NioCorp values Casey’s contributions and wishes him success in his future endeavors. Additionally, Mr. Peter Dickie has resigned from his position as Corporate Secretary, a decision accepted by the board. He will continue to act as the President.
After speaking with Neal Shah, he mentioned that Forward has been dedicating a considerable amount of time to NioCorp and wants to return to family life, which is understandable. However, this made me curious about whether he had been buying or selling shares before the disappointing preliminary resource estimate disclosed this week. After all, there was a nice pump last year (under the old NB.v ticker):
and a bit of a downturn this week (under the new NB.to ticker):
Monday and Tuesday were quite a ride for niobium investors! However, the stock has still risen about 8 times over the past 18 months, which is way better than a poke in the eye.
Eventually, I had a look at the SEDI filings, and it appears Forward tends to file late.
SEDI rules, as I understand, are pretty straightforward. Insiders must disclose any changes in their holdings within 5 calendar days. While I’m not a lawyer, the process isn’t that complicated:
CANADIAN SECURITIES REGULATORS INFORM ISSUERS AND REPORTING INSIDERS ABOUT ACCELERATED FILING DEADLINES, FROM 10 CALENDAR DAYS DOWN TO FIVE, STARTING NOVEMBER 1ST, 2010. A new, harmonized insider reporting regime for Canada became effective on April 30, 2010 under National Instrument 55-104 Insider Reporting Requirements and Exemptions and the related Companion Policy. Following a six-month transition period that ended on October 31, 2010, the filing deadline for reporting insiders to report changes in their holdings was tightened to five calendar days from ten days (initial reports remain under a 10-day filing deadline).
So how is Mr. Forward doing? He has engaged in nearly 300 insider transactions since he began reporting to SEDI back in 2001. Forty-seven of these have been since October 31, 2010. A histogram illustrates how promptly he files. This chart indicates how many times he filed with SEDI within 10 days of the transaction, how many times submissions took 11 to 20 days, and so on.
The positive aspect is that there was only one occurrence where it took him over 2,000 days to complete a filing. The downside, however, is that even since the filing deadline was shortened to five days, he has taken longer than 10 days to file on more than 75% of occasions. Yes, some of these may have been initial position statements, and we all forget to file things from time to time, don’t we? But this is quite extreme.
In any case, Forward and a number of other NioCorp executives recently submitted SEDI disclosures in March, nearly all of which were tardy. It seems Peter Dickie might be the only insider who understands the importance of timely filings. The median delay between the transaction and filing was 43 days, with an average of 78 days. I used to treat my tax issues that way for a few years. Sadly, I ended up with some hefty penalties. I don’t mean to exaggerate, but it’s not insignificant. I mentioned to Mr. Shah that filings are straightforward, and I’d hate to think the company views regulatory compliance so casually.
Shah indicated he was unaware of any such problems. He mentioned that the company has historically allowed individuals to manage these filings, but has recently started assigning more responsibility to its legal team. So, hopefully, improvements will follow.
I’ll keep you posted if I receive further information from them. NioCorp is set for a Q&A on its PEA this coming Monday, which should be interesting.
Mr. Forward did not return a message left at his Vancouver office.