A Thailand-based trader is to pay US$5.2m to settle charges of trading on non-public information ahead of an announcement on the acquisition of Smithfield Foods by China’s Shuanghui Holdings.
Bangkok-based Badin Rungruangnavarat made more than $3m in “illicit profits” just days before the deal was announced, by insider trading in Smithfield securities, the Securities and Exchange Commission said yesterday (5 September). The SEC froze his brokerage account assets on 5 June after filing a complaint, it said.
“Badin loaded up on out-of-the-money Smithfield call options and single-stock futures contracts in the week leading up to a May 29 public announcement about the proposed sale of Smithfield Foods to Shuanghui International Holdings,” the SEC noted.
“Among his possible sources of material, non-public information about the impending deal was a Facebook friend who was an associate director at the investment bank for a different company that was considering a Smithfield acquisition.”
The settlement was approved by Judge Matthew Kennelly of the US District Court for the Northern District of Illinois who said their “quick action” in June to stop Badin’s insider trading profits from leaving the US “made this multi-million dollar settlement possible”.
“Once he was denied access to his trading account, Badin elected to forfeit all of his ill-gotten proceeds plus pay a $2 million penalty to settle the case against him,”
Shuanghui International Holdings, China’s largest meat processor, announced plans to purchase US pork producer Smithfield Foods for $4.7bn in May.