A US district court in New York has entered a temporary restraining order freezing assets and trading proceeds from the sale of Spanish IT firm Telvent's (Nasdaq: TLVT) shares to multinational firm Schneider Electric, the US securities regulator SEC announced in a statement.
The watchdog filed a complaint alleging that yet-to-be-identified purchasers engaged in illegal insider trading in the days preceding the June 1 announcement that Schneider Electric and Telvent had entered into an agreement under which Schneider would offer to acquire all of the outstanding common stock of Telvent at a price of US$40 per share, a 16% premium over the previous day's closing price.
"The complaint seeks permanent injunctive relief, the disgorgement of all illegal profits and the imposition of civil money penalties," SEC said.
Between April 29 and May 27, the purchasers bought 1,200 Telvent call option contracts, about two-thirds of which were purchased within five calendar days. With the move, the purchasers made some US$475,000 from the sale of the call options.
The regulator called for the purchasers in question to identify themselves, and it prohibited them from destroying documents.