Monday, June 10, 2013

Want to Commit Insider Trading? Here’s How Not to Do It

From NY Times’ Dealbook: Traders who act on confidential insider information usually try their best to keep their actions hidden from view. But other times, insider trading just leaps off the page, as if someone decides to directly flout securities law.

A recent case filed by the Securities and Exchange Commission falls into such a category. It is as if the trader in question had a sign on his back that said: “Sue me!”  Civil charges were filed last week against Badin Rungruangnavarat, who was accused of trading ahead of the May 29 announcement of Shuanghui International’s acquisition of Smithfield Foods.

Smithfield’s stock jumped nearly 25 percent after the news was made public. Mr. Badin conducted a flurry of trading in speculative securities the week before the announcement, producing a paper profit of $3.2 million – a 3,400 percent gain in only eight days.  A Federal District Court in Chicago froze the account at the S.E.C.’s request after Mr. Badin, who lives in Bangkok, tried to withdraw $3 million.....

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