31 July 2013 00:12 [Source: ICIS news]
HOUSTON (ICIS)--The US Securities and Exchange Commission on Tuesday charged a former Banco Santander executive and former Spanish judge with insider trading in regard to a proposed takeover by BHP Billiton of PotashCorp.
In a lawsuit filed in US District Court in New York, the SEC claims that the Spanish investment bank was acting as an advisor for the proposed acquisition when Cedric Canas Maillard, then an advisor to Banco Santander’s CEO, learned that the bank was help global mining giant BHP in its plan to acquire the Canadian producer.
The complaint states that Canas then tipped off his friend, Judge Julio Marin Ugedo, about the bid for PotashCorp. The SEC alleges that Canas decided to buy roughly 30,000 shares of the North American fertilizer producer through contracts-for-difference (CFD), which are leveraged securities not traded in the US.
The suit states Marin bought 1,393 shares, and the federal agency said he has admitted discussing the PotashCorp acquisition with Canas prior to the purchase.
The PotashCorp bid fell apart in August 2010 when the producer rejected the $38.6bn (€29.0bn) takeover attempt, which caused Potash shares to rise more than 25%. The SEC said Canas and Marin then sold their holdings and netted profits of $917,239 and $43,566, respectively.
The SEC is attempting to recover those gains as well as impose civil penalties against the pair.
“Canas used his position as an insider at an investment bank to trade CFDs based on confidential information. To those who think they can mask their insider trading by trading CFDs rather than the underlying equity security this case demonstrates our resolve to detect such trading and hold them accountable,” said Daniel Hawke, head of the SEC's Market Abuse Unit.
This is not the first charges made against employees of the Spanish bank, as a former Banco Santander analyst in 2011 agreed to pay more than $625,000 to settle insider trading charges made by the SEC related to the PotashCorp bid.
($1 = €0.75)
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