(Updates throughout with additional context, background.)
The Securities and Exchange Commission said Wednesday it charged
an employee of Perot Systems Corp. (PER) with insider trading
related to Dell Inc.'s (DELL) proposed $3.9 billion acquisition of
the IT services company.
The SEC charged Richardson, Texas, resident Reza Saleh with
making $8.6 million in illicit profits after selling call option
contracts he had built up using non-public information on the deal.
Saleh allegedly learned the information about the deal earlier this
month through his employment at Parkcentral Capital Management LP
and Perot Systems. Parkcentral Capital has since placed Saleh on
administrative leave.
The SEC said it was seeking a court order to freeze Saleh's
assets.
The options market played host to rampant trading in Perot days
before the deal was announced, suggesting some traders might have
anticipated the news. Starting Sept. 9 and continuing through
Monday, traders bought and sold far more options in Perot Systems
than they historically have. And the bulk of the activity appeared
to be bullish, with traders preparing for Perot's stock to move
higher.
According to the SEC's complaint, Saleh purchased 9,332 Perot
Systems call options contracts through two brokerage accounts
between Sept. 4 and Sept. 18. The call option contracts were set to
expire in October and January. Saleh sold all of the call options
following the merger announcement as Perot Systems' stock jumped
about 65%, the SEC alleges.
The SEC complaint also said Saleh "acknowledged that his
purchases of Perot Systems call options were based on his knowledge
of the impending transaction."
The complaint also names Amir Saleh, also of Richardson, as a
relief defendant, to recover trading profits he allegedly received
as a co-account holder on one of Reza Saleh's brokerage
accounts.
A spokesman for Perot Systems spokesman was unavailable for
immediate comment. Efforts to receive contact information for Saleh
through the SEC were unsuccessful.
-By John Kell and Wallace Witkowski; 415-439-6400;
AskNewswires@dowjones.com
(Tennille Tracy contributed to this article.)