Spanish Banker & Judge|Accused of Inside Trading

MANHATTAN (CN) - A former Spanish judge and a top executive at Banco Santander made nearly $1 million from illegal inside trading in shares of one of the world's biggest potash companies, the SEC claims in court.

The SEC sued Cedric Cañas Maillard and Julio Marín Ugedo, in Federal Court, for their trades in Potash Corp. of Saskatchewan shares in August 2010.

"During 2010, Cañas was a high-ranking official at Banco Santander, S.A. ('Santander'), headquartered in Madrid, Spain and the largest bank in the Eurozone. Until he was terminated in January 2011, Cañas served as an adviser to Santander's Chief Executive Officer ('CEO'). Marín is an attorney and a former Spanish judge, and also is a close, personal friend of Cañas," according to the complaint.

It continues: "On August 5, 20 10, while working in Santander's offices in Madrid, Spain, Cañas learned that Santander had been asked by BHP Billiton ('BHP'), the world's largest mining company by revenue, to serve as a financial advisor and help underwrite BHP's confidential, proposed acquisition of Potash. On August 9, 2010, Cañas learned that Santander had approved the financing commitment for the potential Potash acquisition.

"Between August 9 and 13, 2010, Cañas purchased the equivalent of30,000 shares of Potash common stock through highly leveraged securities known as Contracts-for-Difference ('CFDs'). Cañas also informed his friend Marín about the potential acquisition and advised him to trade. Marín purchased 1,393 shares of Potash stock between August 10 and 12, 2010.

"On August 17, 2010, Potash publicly announced that its Board of Directors had received and rejected an unsolicited $38.6 billion dollar offer to purchase Potash's common stock for $130 per share, a 16 percent premium to Potash's closing price on the previous day. Even though Potash rejected BHP's tender offer, the share price for Potash stock soared, closing on August 17, 2010 at $143.17, up $31.02, or more than 27 percent, from the previous day's close.

"On August 17th, Cañas liquidated his entire CFD position in Potash and realized a net profit of $917,239.44; On August 17th and 19th, Marín sold his own shares of Potash stock for a net profit of $43,566."

Banco Santander analyst Juan Jose Fernandez Garcia, of Madrid, agreed to pay more than $625,000 to settle similar inside trading charges against him, in April 2011.

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