SEC Accuses Two of Inside Trading

CHICAGO (CN) - The SEC obtained an emergency order freezing the assets of two Spanish men who allegedly made $1.1 million by trading on inside information about last week's multibillion-dollar offer for the Potash Corp. of Saskatchewan. One of the men is the head of a research department at Banco Santander, which advised BHP Billiton on its bid, the SEC said.

Juan Jose Fernandez Garcia, the bank employee, and co-defendant Luis Martin Caro Sanchez, spent $61,000 to buy out-of-the-money call option contracts, then sold all their options "for illicit profits of nearly $1.1 million," the SEC said.

BHP Billiton offered $38.6 billion for Potash on Aug. 17 - $130 per share, a 16 percent premium over its Aug. 16 closing price of $112.15, according to the SEC complaint.

The Potash Corp. of Saskatchewan, based in Saskatoon, is the world's largest producer of fertilizer minerals; its stock trades on the New York Stock Exchange. BHP, based in Melbourne, Australia, is the world's largest mining company, the SEC says.

Garcia, 35, of Madrid, is Banco Santander's head of European equity derivatives research; Sanchez, 36, also of Madrid, used the same broker as Garcia, the SEC says.

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