A Bangkok-based trader will pay $5.2 million to settle U.S. regulatory claims that he traded on inside information before an announcement that Smithfield Foods Inc. (SFD) would be acquired by China’s biggest pork producer.
Badin Rungruangnavarat made more than $3 million in illicit profits on Smithfield call options and single-stock futures contracts purchased in the week before the May 29 announcement of the company’s proposed sale to Shuanghui International Holdings Ltd., the Securities and Exchange Commission said today. His brokerage account assets were frozen on June 5, the SEC said in a statement.
Rungruangnavarat made his purchases from May 21 through May 28 using an account at Interactive Brokers LLC., the SEC said. He sought to withdraw more than $3 million from his account on June 3, the agency said.
“Our quick action in June to stop Badin’s insider-trading profits from leaving the U.S. made this multimillion-dollar settlement possible,” Daniel M. Hawke, head of the SEC Enforcement Division’s Market Abuse Unit, said in the statement. “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.”
The penalty plus a $3.2 million disgorgement was approved by Judge Matthew Kennelly of the U.S. District Court for the Northern District of Illinois, the SEC said.
“Our client is very pleased that the mutually agreeable settlement” was reached quickly,’’ Jose Lopez, an attorney for Rungruangnavarat at Perkins Coie LLP in Chicago, said in an e-mail statement. The agreement resulted in a portion of the frozen assets being returned to Rungruangnavarat, Lopez said.
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