The Securities and Exchange Commission has charged two residents of Madrid, Spain with insider trading and obtained an emergency court order to freeze their assets after they made nearly $1.1 million in illegal profits by trading in advance of last week's public announcement of a multi-billion dollar cash tender offer by BHP Billiton Plc to acquire Potash Corp. of Saskatchewan Inc.I wish the SEC would go after bigger prizes like high-frequency trading. This is the most important issue considering it was rogue bots who caused the May 6th crash. But I guess the SEC has more important things to do such as watching porn.
The SEC alleges that Juan Jose Fernandez Garcia and Luis Martin Caro Sanchez purchased - on the basis of material, non-public information about the impending tender offer - hundreds of "out-of-the-money" call option contracts for stock in Potash in the days leading up to the public announcement of BHP's bid on August 17. Garcia is the head of a research arm at Banco Santander, S.A. - a Spanish banking group advising BHP on its bid. Garcia and Sanchez jointly spent a little more than $61,000 to purchase the contracts in U.S. brokerage accounts. Immediately after BHP's offer was announced publicly on August 17, Garcia and Sanchez sold all of their options for illicit profits of nearly $1.1 million.
Black Swan Insights