The Securities and Exchange Commission disclosed a Bangkok,
Thailand-based trader agreed to pay $5.2 million to settle charges
he traded on inside information in advance of Smithfield Foods
Inc.'s (SFD) proposed acquisition.
Badin Rungruangnavarat's agreement to settle the insider trading
case came after the SEC in early June obtained an emergency court
order to freeze Mr. Badin's assets after he allegedly profited more
than $3 million by trading in advance of Smithfield's acquisition
announcement.
Chinese meat producer Shuanghui International Holdings Ltd. in
May agreed to acquire Smithfield for roughly $4.7 billion, striking
what would be the largest takeover of a U.S. company by a Chinese
buyer.
The SEC alleged Mr. Badin loaded up on Smithfield
out-of-the-money call options and single-stock futures contracts in
the week leading up to the May public announcement of the proposed
sale of Smithfield.
He allegedly made those purchases based on material, nonpublic
information about the potential acquisition, the agency said. Among
his possible sources was a Facebook friend who was an associate
director at an investment bank for a different company that was
considering a Smithfield bid, the SEC said.
Mr. Badin agreed to pay $3.2 million in disgorgement and a $2
million penalty, without admitting or denying the SEC's
allegations.
"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," said Daniel M. Hawke,
chief of the SEC Enforcement Division's Market Abuse Unit.
Write to John Kell at john.kell@wsj.com
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