SEC Charges Two In Spain for Insider Trading Related to PotashCorp (POT) Takeover
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The Securities And Exchange Commission on Tuesday charged two men from Spain with insider trading, alleging that by trading ahead of last week’s offer from BHP Billiton Ltd. (NYSE: BHP) to acquire Potash Corp. of Saskatchewan Inc. (NYSE: POT) they made $1.1 million in illegal profits.
Juan Jose Fernandez Garcia and Luis Martin Caro Sanchez have had their assets frozen by the SEC through an emergency court order.
Garcia is the head of the research arm at Banco Santander S.A., a Spanish banking group advising BHP on its bid for Potash. Garcia and Sanchez together spent $61,000 to acquire “out of the money” call option contracts for stock options in Potash in the days leading up to the announcement of the offer from BHP on August 17, after which the two sold all of the options for illicit of roughly $1.1 million.
"Garcia and Sanchez tried to move off-shore highly suspicious trading profits made just a few days before. When abusive market practices occur, as in the case against Garcia and Sanchez, we will act swiftly and decisively to deny wrongdoers the profits of their illegal activity," said Daniel M. Hawke, Chief of the Enforcement Division's Market Abuse Unit.
The SEC alleges that Garcia was in possession of knowledge of the BHP offer prior to its public announcement when he purchased 282 call option contracts for Potash from August 12 to August 16, while Sanchez purchased an additional 331 contracts through an account with Interactive Brokers LLC.
Neither individual had previously traded in Potash this year according to the SEC.
Juan Jose Fernandez Garcia and Luis Martin Caro Sanchez have had their assets frozen by the SEC through an emergency court order.
Garcia is the head of the research arm at Banco Santander S.A., a Spanish banking group advising BHP on its bid for Potash. Garcia and Sanchez together spent $61,000 to acquire “out of the money” call option contracts for stock options in Potash in the days leading up to the announcement of the offer from BHP on August 17, after which the two sold all of the options for illicit of roughly $1.1 million.
"Garcia and Sanchez tried to move off-shore highly suspicious trading profits made just a few days before. When abusive market practices occur, as in the case against Garcia and Sanchez, we will act swiftly and decisively to deny wrongdoers the profits of their illegal activity," said Daniel M. Hawke, Chief of the Enforcement Division's Market Abuse Unit.
The SEC alleges that Garcia was in possession of knowledge of the BHP offer prior to its public announcement when he purchased 282 call option contracts for Potash from August 12 to August 16, while Sanchez purchased an additional 331 contracts through an account with Interactive Brokers LLC.
Neither individual had previously traded in Potash this year according to the SEC.
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