The SEC
obtained an emergency court order to freeze the assets of traders using foreign
accounts to reap approximately $4.6 million in potentially illegal profits by
trading in advance of the Sunday, June 30, 2013 announcement that Onyx
Pharmaceuticals, Inc. had received, but rejected an acquisition offer from
Amgen, Inc.
The SEC alleges that unknown traders took
risky bets that Onyx's stock price would increase by purchasing call options on
June 26, 27 and 28, the three trading days before the announcement. Through
quick, cross country coordination between the agency's Los Angeles and New York
offices, the SEC took emergency action to freeze the traders' assets before
courts closed for the holiday.
"This action demonstrates that the SEC
will not hesitate to freeze the assets of suspicious foreign traders when the
timing and size of their trades indicate that they were misusing inside
information, and use of foreign accounts will not dissuade us," said
Michele Wein Layne, Director of the SEC's Los Angeles Regional Office.
According to the SEC's complaint filed in
federal court in Manhattan, on June 30, 2013 Onyx announced that it had
received, but rejected, an unsolicited proposal from Amgen to acquire all of
Onyx's outstanding shares and share equivalents for $120 per share in cash. The
Announcement also stated that Onyx's board of directors rejected Amgen's
proposal and that Onyx had authorized its financial advisors to contact
potential acquirers who may have an interest in a transaction with Onyx.
Amgen's $120 per share price offer represented a 38% premium to Onyx's closing
share price on Friday June 28, 2013. The complaint further alleges that as a
result of the announcement, Onyx's share price increased from a close of $86.82
on over 51% on Monday July 1 compared with the prior trading day's closing
price, and that the trading volume of its stock increased by over 900% that
day. The complaint alleges that the traders, as a result of these well-timed
trades, collectively earned a profit of approximately $4.6 million in just
three days.
For more information, visit SEC Freezes Assets Of Insider Traders in Onyx Pharmaceuticals.
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The attorneys at Sallah Astarita & Cox, LLC include veteran securities litigators and former SEC Enforcement Attorneys. We have decades of experience in securities litigation matters, including the defense of enforcement actions. We represent firms and brokers nationwide. For more information contact Mark Astarita at 212-509-6544 or at mja@sallahlaw.com
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The attorneys at Sallah Astarita & Cox, LLC include veteran securities litigators and former SEC Enforcement Attorneys. We have decades of experience in securities litigation matters, including the defense of enforcement actions. We represent firms and brokers nationwide. For more information contact Mark Astarita at 212-509-6544 or at mja@sallahlaw.com
