Audit into Quebec securities watchdog clears it of wrongdoing in SNC probe

The head office of SNC Lavalin in Montreal, 2015. Ryan Remiorz/The Canadian Press

Quebec’s securities regulator was cleared of conflict of interest allegations Monday following an independent audit in connection with the body’s investigation of SNC-Lavalin Group Inc.

Mario Bilodeau, appointed by the province in April, says a probe by the Autorité des marchés financiers into SNC-Lavalin executives was “adequate” and that his “conclusions invalidate the allegations of public wrongdoing.”

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The audit was launched following allegations in a Quebec newspaper — which cited two anonymous former employees of the financial watchdog — that their colleagues had “closed their eyes” to parts of the probe.

Dubbed Project Falcon, the regulator’s investigation examined financial documents and transactions carried out by some SNC-Lavalin managers, including Michael Novak, spouse of former Quebec Liberal justice minister Kathleen Weil, between 2011 and 2012 following suspicions of “possible 1/8 accounting 3/8 malpractice and insider trading,” Bilodeau said.

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The watchdog’s senior director of investigations, Frederic Perodeau, was named in the allegations. Media reports say the lawyer by training had provided counsel to SNC-Lavalin between 2010 and 2012, and later oversaw the probe into his previous employer.

A total of 32 people were interviewed as part of Bilodeau’s audit, which concluded Perodeau was not in a conflict of interest and that “the Authority can be proud of the way all the professionals have accomplished their tasks and respected their duties.”

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