In a lawsuit filed in the US District Court in New York, the securities regulators claimed that Cedric Cañas Maillard and friend Julio Marín Ugedo, a former judge in Spain, made $1m in illegal profits.
Maillard received secret information that BHP Billiton has appointed the bank to offer advice on the proposed acquisition of Potash Corporation and shared the same with his friend.
Acting on the non-public information, Cañas purchased 30,000 Potash shares from 9 August to 31 August 2010 through contracts-for-difference (CFD), which are leveraged securities not traded in the US. Marín bought 1,393 Potash shares, through two Spain-based brokerage accounts.
SEC market abuse unit chief Daniel Hawke commented, "To those who think they can mask their insider trading by trading CFDs rather than the underlying equity security, this case demonstrates our resolve to detect such trading and hold them accountable for violating the federal securities laws."
The regulator’s complaint accused them for violating various regulations of the Securities Exchange Act and sought recovery of ill-gotten gains with prejudgment interest, financial penalties, and orders of permanent injunction against Cañas and Marín.
