Nice (Illegal) Work if You Can Get It

     MANHATTAN (CN) - Unknown traders made nearly $5 million in "highly suspicious trading" on inside information about a proposed buyout of Onyx Pharmaceuticals, the SEC claims in court.
     The SEC sued One or More Unknown Traders in the Securities of Onyx Pharmaceuticals, in Federal Court.
     The suspicious, unknown defendants placed their trades through accounts in Beirut and the Canary Islands, the SEC says. They bought call options in Onyx just before the company's public announcement, on June 30, that it had received, and rejected, a buyout offer from Amgen. Amgen offered the equivalent of $120 a share, in case and stock. Onyx's board of directors rejected it, saying the offer significantly undervalued Onyx.
     Amgen's offer was 38 percent higher than Onyx's $86.62 price at closing on Friday, June 28. The public announcement caused Onyx shares to leap to $131.22 - more than 51 percent - and its trading volume spiked by more than 900 percent, the SEC said in its complaint.
     The unknown traders are believed to have made more than $4.8 million, just like that. The traders bought 849 call options at a strike price of $85 to $90, an increase of more than 1,000 percent of historical trading.
     The SEC seeks disgorgement, penalties and an injunction.