Court freezes Telvent's share sales to Schneider

Wednesday, June 8, 2011

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.

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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.