In its quarterly earnings report late Thursday, Fairfax disclosed that Quebec's Autorité des marchés financiers is looking into the company.
"The investigation concerns the possibility of illegal insider trading and/or tipping (not involving any personal trading by the individuals) in connection with a Quebec transaction," Fairfax said.
Insider trading is when individuals or companies with advanced knowledge of pending news trade based on that information to make money. Tipping is when a person with that advanced knowledge shares it with someone else so they can trade on it.
Watsa is one of Canada's most well-known activist investors, who has a good track record of investing in beaten down companies and helping to turn them around. Watsa and Fairfax played a prominent role in an attempt to buy BlackBerry last year.
"We are fully cooperating with the authorities and we are required strict confidentiality during the investigation," Watsa said on a conference call discussing the results early Friday "... I can say there is no personal trading involved and we are confident that we did nothing wrong."Suggest a correction