FROM: U.S. SECURTIES AND EXCHANGE COMMISSION
06/06/2013 10:45 AM EDT
SEC Freezes Assets of Thailand-Based Trader for Insider Trading Ahead of Smithfield Foods Acquisition Announcement
Washington, D.C., June 6, 2013 — The Securities and Exchange Commission today announced an emergency court order to freeze the assets of a trader in Bangkok, Thailand, who made more than $3 million in profits by trading in advance of last week's announcement that Smithfield Foods agreed to a multi-billion dollar acquisition by China-based Shuanghui International Holdings.
The SEC alleges that Badin Rungruangnavarat purchased thousands of out-of-the-money Smithfield call options and single-stock futures contracts from May 21 to May 28 in an account at Interactive Brokers LLC. Rungruangnavarat allegedly made these purchases based on material, nonpublic information about the potential acquisition, and among his possible sources is a Facebook friend who is an associate director at an investment bank to a different company that was exploring an acquisition of Smithfield. After profiting from his timely and aggressive trading, Rungruangnavarat sought to withdraw more than $3 million from his account on June 3.
"The speed in which we were able to bring this emergency action exemplifies the talent, tenacity, and commitment that the SEC staff brings to bear every day to keep our markets fair and investors safe," said Andrew Ceresney, Co-Director of the SEC's Division of Enforcement.
Merri Jo Gillette, Director of the SEC's Chicago Regional Office, added, "As alleged in our complaint, not only did the defendant trade out of the money Smithfield call options, he further pumped up his profits by purchasing single-stock futures, thereby reaping a total unrealized return on his investment of 3,400 percent in the span of eight days. We will act quickly and decisively to uncover and take action against insider trading no matter where the trader resides or what types of securities are used to profit from nonpublic information."
According to the SEC's complaint filed under seal yesterday in U.S. District Court for the Northern District of Illinois, Smithfield publicly announced on May 29 that Shuanghui agreed to acquire the company for $4.7 billion, which would represent the largest-ever acquisition of a U.S. company by a Chinese buyer. Smithfield, which is headquartered in Smithfield, Va., is the world's largest pork producer and processor. Following the announcement, Smithfield stock opened nearly 25 percent higher than the previous day's closing price.
The SEC obtained the emergency court order late yesterday on an ex parte basis. The order freezes the proceeds of Rungruangnavarat's securities purchases, grants expedited discovery, and prohibits Rungruangnavarat from destroying evidence.
The SEC's complaint alleges that Rungruangnavarat violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition to the emergency relief, the SEC is seeking disgorgement of ill-gotten gains with prejudgment interest, a financial penalty, and a permanent injunction.
The SEC's expedited investigation, which is continuing, was conducted jointly by staff in the Enforcement Division's Market Abuse Unit and the Chicago Regional Office, including Kathryn A. Pyszka, Frank D. Goldman, R. Kevin Barrett, Benjamin J. Hanauer and Steven C. Seeger. The Market Abuse Unit is headed by Chief Daniel M. Hawke, and the Chicago office leadership in this matter are Regional Director Merri Jo Gillette and Associate Regional Director Timothy Warren. The SEC acknowledges the assistance of the Options Regulatory Surveillance Authority (ORSA).
Showing posts with label ASSET FREEZE. Show all posts
Showing posts with label ASSET FREEZE. Show all posts
Friday, June 7, 2013
Sunday, November 25, 2012
SEC BRINGS CHARGES AGAINST OPERATORS OF ALLEGED PRIME BANK SCHEME
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., Nov. 19, 2012 — The Securities and Exchange Commission today charged the operators of a long-running prime bank scheme with defrauding investors who were promised sky-high returns on loans to a secret European trust. It also is seeking an emergency court order to freeze the operators’ assets for the benefit of investors.
The SEC alleges that Billy W. McClintock, who lives in Florida, and Dianne Alexander, a former Georgia resident who now lives in California and also is known as Linda Dianne Alexander, raised $15 million from at least 220 investors in more than 20 states, primarily Georgia. McClintock portrayed himself as the "U.S. Director" of a secret European trust that had the power to create money and claimed to have appointed Alexander as a "U.S. Regional Director" for the trust. McClintock and Alexander led investors to believe that they could receive 38 percent annual interest on loans to the trust, provided they abide by the trust’s strict rules requiring secrecy. However, investor money was instead used to merely pay other investors, the hallmark of a Ponzi scheme.
"McClintock and Alexander pitched an investment opportunity that simply did not exist. They merely reshuffled funds between investors in a modern take on a classic prime bank scheme," said William P. Hicks, Associate Director of Enforcement in the SEC’s Atlanta Regional Office.
According to the SEC’s complaint filed in U.S. District Court for the Northern District of Georgia, McClintock and Alexander began conducting the scheme by at least 2004 and misrepresented or omitted facts about investment risks, expected returns, and how investor funds would be used. The complaint charges McClintock and Alexander with violating the securities registration, broker-dealer registration, and antifraud provisions of the U.S. securities laws and a related SEC anti-fraud rule.
The SEC’s complaint also names as relief defendants two entities that McClintock controls — MSC Holdings USA LLC, and MSC Holdings Inc. — and another entity controlled by Alexander — MSC GA Holdings LLC. The SEC believes the three firms may have received ill-gotten assets from the fraud that should be returned to investors.
Information on how to avoid prime bank frauds is available at: http://www.sec.gov/divisions/enforce/primebank.shtml and
http://investor.gov/investing-basics/avoiding-fraud/types-fraud/prime-bank-investments
The SEC’s investigation, which is continuing, has been conducted by Natalie M. Brunson and Lucy T. Graetz of the SEC's Atlanta Regional Office under the supervision of Aaron W. Lipson. Senior Trial Counsel Pat Huddleston II will lead the litigation. The SEC acknowledges the assistance of the U. S. Attorney's Office for the Northern District of Georgia and the Federal Bureau of Investigation’s Atlanta Division in this matter.
Washington, D.C., Nov. 19, 2012 — The Securities and Exchange Commission today charged the operators of a long-running prime bank scheme with defrauding investors who were promised sky-high returns on loans to a secret European trust. It also is seeking an emergency court order to freeze the operators’ assets for the benefit of investors.
The SEC alleges that Billy W. McClintock, who lives in Florida, and Dianne Alexander, a former Georgia resident who now lives in California and also is known as Linda Dianne Alexander, raised $15 million from at least 220 investors in more than 20 states, primarily Georgia. McClintock portrayed himself as the "U.S. Director" of a secret European trust that had the power to create money and claimed to have appointed Alexander as a "U.S. Regional Director" for the trust. McClintock and Alexander led investors to believe that they could receive 38 percent annual interest on loans to the trust, provided they abide by the trust’s strict rules requiring secrecy. However, investor money was instead used to merely pay other investors, the hallmark of a Ponzi scheme.
"McClintock and Alexander pitched an investment opportunity that simply did not exist. They merely reshuffled funds between investors in a modern take on a classic prime bank scheme," said William P. Hicks, Associate Director of Enforcement in the SEC’s Atlanta Regional Office.
According to the SEC’s complaint filed in U.S. District Court for the Northern District of Georgia, McClintock and Alexander began conducting the scheme by at least 2004 and misrepresented or omitted facts about investment risks, expected returns, and how investor funds would be used. The complaint charges McClintock and Alexander with violating the securities registration, broker-dealer registration, and antifraud provisions of the U.S. securities laws and a related SEC anti-fraud rule.
The SEC’s complaint also names as relief defendants two entities that McClintock controls — MSC Holdings USA LLC, and MSC Holdings Inc. — and another entity controlled by Alexander — MSC GA Holdings LLC. The SEC believes the three firms may have received ill-gotten assets from the fraud that should be returned to investors.
Information on how to avoid prime bank frauds is available at: http://www.sec.gov/divisions/enforce/primebank.shtml and
http://investor.gov/investing-basics/avoiding-fraud/types-fraud/prime-bank-investments
The SEC’s investigation, which is continuing, has been conducted by Natalie M. Brunson and Lucy T. Graetz of the SEC's Atlanta Regional Office under the supervision of Aaron W. Lipson. Senior Trial Counsel Pat Huddleston II will lead the litigation. The SEC acknowledges the assistance of the U. S. Attorney's Office for the Northern District of Georgia and the Federal Bureau of Investigation’s Atlanta Division in this matter.
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