Thailand-Based Trader Sued by SEC Over Smithfield Deal Profits

A Thailand-based trader was sued by U.S. regulators over claims he reaped more than $3 million in profits trading ahead of the announcement that Smithfield Foods Inc. would be acquired by China’s biggest pork producer.

Badin Rungruangnavarat bought out-of-the-money Smithfield call options and futures contracts last month after obtaining nonpublic information from sources that may have included a Facebook friend, the Securities and Exchange Commission said yesterday in a statement announcing the lawsuit filed in federal court in Illinois. The SEC obtained an emergency court order to freeze Rungruangnavarat’s assets, the agency said.

Shuanghui International Holdings Ltd. agreed on May 29 to acquire Virginia-based Smithfield, the world’s largest hog producer, for about $4.72 billion. 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 SEC said.

“The speed in which we were able to bring this emergency action exemplifies the talent, tenacity, and commitment that the SEC staff brings to bear every day to keep our markets fair and investors safe,” said Andrew Ceresney, co-director of the SEC’s division of enforcement.

The SEC said there is no known defense counsel for Rungruangnavarat at this time.

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