FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission charged two business associates in Chile with insider trading on nonpublic information that one of them learned while serving on the board of directors of a pharmaceutical company. The agency obtained a court order to freeze assets in the U.S. brokerage accounts used to conduct the trading.
The SEC alleges that Juan Cruz Bilbao Hormaeche exploited highly confidential information from CFR Pharmaceuticals S.A. board meetings at which a tender offer by Abbott Laboratories was discussed. In a U.S. brokerage account of which he is the beneficiary, Bilbao caused the purchase of millions of dollars’ worth of American Depositary Shares (ADS) of CFR Pharmaceuticals on the basis of nonpublic information about progressing negotiations between the two companies. Bilbao used Tomás Andrés Hurtado Rourke to place the trades in the brokerage account, and Hurtado also purchased several hundred thousand dollars’ worth of ADS in his own U.S. brokerage account. After Abbott Laboratories publicly announced a definitive agreement to acquire CFR Pharmaceuticals and commenced the tender offer, Bilbao and Hurtado tendered the ADS they purchased. They reaped approximately $10.6 million in illicit profits.
“Bilbao abused his position on a company’s board as he stockpiled ADS on the basis of inside information that a major payday was coming soon on those shares,” said Karen L. Martinez, Director of the SEC’s Salt Lake Regional Office.
The SEC’s complaint filed in U.S. District Court for the Southern District of New York alleges that Bilbao violated Section Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3. The complaint also alleges Hurtado violated Sections 14(e) and 20(e) of the Exchange Act and Rule 14e-3. The complaint seeks disgorgement of ill-gotten gains plus prejudgment interest and financial penalties in addition to permanent injunctions against further violations of these provisions of the securities laws. Bilbao allegedly used an offshore entity to engage in the insider trading, and the SEC seeks to repatriate all illegal profits.
The SEC’s investigation was conducted by William B. McKean and the litigation will be led by Daniel J. Wadley of the Salt Lake Regional Office.
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Showing posts with label PHARMACEUTICAL COMPANY. Show all posts
Showing posts with label PHARMACEUTICAL COMPANY. Show all posts
Friday, January 2, 2015
Thursday, October 16, 2014
SEC CHARGES FINANCIAL ANALYST WITH INSIDER TRADING ON EMPLOYER'S CONFIDENTIAL INFORMATION
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission today announced insider trading charges against a Massachusetts man who allegedly tipped his friend with nonpublic information about potential acquisition targets of the pharmaceutical company where he worked.
The SEC alleges that Zachary Zwerko was tasked with evaluating potential acquisitions, and he repeatedly accessed confidential files about his employer’s acquisition targets and passed details onto a friend from business school so he could purchase securities prior to public announcements. Zwerko accessed and shared information about a deal he was assigned to work on as well as a potential acquisition tasked to others. The illegal tips enabled his friend to make approximately $683,000 in illicit profits.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Zwerko.
“Zwerko’s employer entrusted him with confidential information about possible acquisitions, and he was brazen enough to steal that information for his own benefit,” said Sanjay Wadhwa, Senior Associate Director of the SEC’s New York Regional Office. “The SEC’s swift enforcement action shows that Zwerko miscalculated the true consequences of his actions.”
The SEC’s complaint was filed after hours on October 10 in U.S. District Court for the Southern District of New York. The complaint charges Zwerko, who lives in Cambridge Mass., with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.
The SEC’s investigation, which is continuing, has been conducted by Dominick D. Barbieri, Neil Hendelman, and Charles D. Riely. The case has been supervised by Mr. Wadhwa. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York, Federal Bureau of Investigation, and Financial Industry Regulatory Authority.
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