The U.S. Securities and Exchange Commission won a temporary asset freeze against three Swiss firms, claiming they profited from insider trading in Arch Chemicals Inc. (ARJ) shares.
The SEC, in a case filed July 15 in Manhattan federal court, said two of the firms are controlled by Yomi Rodrig, a Turkish trader living in Geneva. The three are accused of making millions of dollars by buying Arch shares in the days before Basel, Switzerland-based Lonza Group Ltd. announced on July 11 its plan to buy the specialty chemicals maker for $1.2 billion. The agency won the asset freeze the same day it filed the suit.
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.
The companies allegedly controlled by Rodrig are Compania Internacional Financiera and Geneva-based Coudree Capital Gestion SA, according to the complaint. The third defendant, Chartwell Asset Management Services, is described in the complaint as an investment adviser based in Geneva.
U.S. District Judge Denise Cote scheduled a hearing July 28 to consider whether to extend the asset freeze.
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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