Former Banker Charged|With Insider Trading

     (CN) – Cedric Cañas Maillard, a former high-ranking official at Banco Santander, was charged with insider trading Thursday by the U.S. Securities and Exchange Commission.
     In a complaint filed in Manhattan Federal Court, the agency says Cañas learned confidentially that the investment bank had been asked by BHP Billiton, one of the world’s largest mining companies, to underwrite its proposed acquisition of fertilizer minerals giant Potash Corporation of Saskatchewan.
     The SEC alleges the Spanish financier and a friend purchased a large Potash call options through a Switzerland-based brokerage account on Aug. 16, 2010, the day before Potash announced it had rejected the takeover bid.
     Potash stock rose more than 27 percent after that announcement, and Cañas was able to sell his call options for a net profit of $278,156 – a gain of more than 1,400 percent.
     This is the second time Cañas has been charged with insider trading in relation to BHP Billiton and Potash Corporation of Saskatchewan deal. On July 30, 2013, he was charged with garnering substantial illicit profits through a scheme that relied on contracts-for-difference.
     In investment parlance, a contract-for-difference is a tradable instrument that’s value mirrors the movements of the asset underlying it. Essentially a contract between an individual and a broker, the vehicle allows the holder to realize profits based on the value of the underlying asset relative the position they’ve locked in.
     Prosecutors said Cañas purchased the equivalent of 30,000 Potash common stock shares in this way and made a net profit of $917,239 the day after Potash’s announcement.
     Last year, Cañas agreed to pay $2 million to settle those charges, but the SEC says a subsequent investigation uncovered other suspicious Potash trades the financier made in foreign accounts.
     The agency’s complaint claims Cañas violated Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3, and seeks disgorgement of his alleged ill-gotten gains with prejudgment interest and financial penalties.
     Representatives of Cañas could not be reached for comment.

%d bloggers like this: