The U.S. Securities and Exchange Commission sued three firms, two of them allegedly controlled by Yomi Rodrig, a Turkish trader living in Geneva, claiming they profited from insider trading in Arch Chemicals Inc. (ARJ) shares.
The SEC, in a lawsuit filed July 15 in Manhattan federal court, said Compania Internacional Financiera SA and two other firms made millions of dollars by buying Arch shares in the days before a July 11 announcement that Basel, Switzerland-based Lonza Group Ltd. planned to buy the specialty chemicals maker for $1.2 billion.
Arch rose 21 percent in the week before Lonza said it would buy all of the Norwalk, Connecticut-based company’s outstanding shares for $47.20 each. Arch jumped an additional 12 percent the day of the announcement to close at $47.37.
In addition to Compania Internacional Financiera, the SEC sued Coudree Capital Gestion SA, a Geneva-based company also allegedly controlled by Rodrig, according to the complaint. A third defendant, Chartwell Asset Management Services, is described in the complaint as an investment adviser based in Geneva.
In 2005, Rodrig agreed to forfeit more than $4.8 million in trading profits and pay a penalty of $1.4 million to resolve an SEC claim that he violated short-selling rules. Rodrig settled without admitting or denying the SEC’s allegations.
“As I read the complaint, it simply says the trades were suspicious,” Ira Sorkin, a lawyer for Rodrig, said today in a telephone interview. “That’s not the standard for trading on inside information.”
The case is SEC v. Compania Internacional Financiera SA, 11-CV-4904, U.S. District Court, Southern District of New York (Manhattan).
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