HOUSTON (ICIS)--The US Securities and Exchange Commission (SEC) accused three traders of profiting from insider information that they had about Sherwin-Williams's acquisition of Valspar.
None of the three people worked for Sherwin-Williams or Valspar, and the SEC made no allegations against the companies.
Sherwin-Williams said it had no comments about the lawsuit.
In the lawsuit, the SEC alleges that Sebastian Pinto-Thomaz worked at a major credit-rating agency, and he learned about Sherwin-Williams's pending acquisition of Valspar when the paint producer consulted the agency about the deal.
The SEC did not name the credit-rating agency.
Once Pinto-Thomaz allegedly learned about the pending deal, he passed along the information to two friends, Abell Oujaddou and Jeremy Millul, the SEC said in the lawsuit.
Oujaddou and Millul then allegedly bought shares of Valspar, the SEC said in the lawsuit. Once the pending acquisition was made public, Oujaddou and Millul allegedly sold their Valspar shares and made profits of about $300,000, the SEC said.
The SEC did not name any lawyers representing Pinto-Thomaz, Oujaddou and Millul, nor did it provide contact information.
Attempts to reach Oujaddou and Millul were unsuccessful.
S&P confirmed that Pinto-Thomaz is employed at the company. It has suspended Pinto-Thomaz, and it is cooperating with authorities, the agency said. "We hold our employees to the highest standards of honesty and integrity and take adherence to our compliance policies very seriously."
Pinto-Thomaz was unable to be reached for comment.
Sherwin-Williams announced that it closed on the Valspar acquisition in June 2017. The deal was valued at $11.3bn
The SEC filed the lawsuit in US District Court, Southern New York District.
The case number is 18-cv-5757.
In a parallel action, the US Attorney for the Southern New York District said the three men were arrested on charges of insider trading. They will be presented before US Magistrate Judge Nathaniel Kevin Fox.
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