SEC Charges Two Traders in Chile with Insider Trading

The SEC charged two business associates in Chile with insider trading on the nonpublic information that one of them learned while serving on the board of directors of a pharmaceutical company.

The SEC alleged that one of the business associates exploited highly confidential information from CFR Pharmaceuticals S.A. board meetings at which a tender offer by Abbott Laboratories was discussed. The business associate caused the U.S. brokerage account, of which that business associate was the beneficiary, to purchase millions of dollars' worth of American Depositary Shares ("ADS") of CFR Pharmaceuticals on the basis of the nonpublic information about negotiations between the two companies, using another business associate to pace the trades in the brokerage account. The second business associate also purchased several hundred thousand dollars' worth of ADS in his own brokerage account.

See: SEC Complaint; SEC Press Release. See also: Insider Trading Specialty Page (available to Cabinet subscribers only).