FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Spanish Trader Agrees to Pay Disgorgement and a Penalty to Settle Insider Trading Case
The SEC’s Complaint, filed in July 2013, alleged that Cañas, who served as an executive advisor to Banco Santander’s CEO, learned confidentially that the investment bank had been asked by one of the world’s largest mining companies, BHP Billiton, to advise and help underwrite its proposed acquisition of Potash Corporation, one of the world’s largest producers of fertilizer minerals. In the days leading up to a public announcement of BHP’s bid, Cañas purchased Potash contracts-for-difference (CFDs), which were highly leveraged securities not traded in the U.S. but based on the price of U.S. exchange-listed Potash stock. The CFDs mirrored the movement and pricing of that stock. Cañas also tipped his close personal friend Julio Marín Ugedo about the potential acquisition and advised him to purchase Potash stock.
The SEC’s Complaint alleged that Cañas purchased 30,000 Potash CFDs from August 9 to August 13, 2010 based on material, non-public information he learned about BHP’s offer to acquire Potash. Marín purchased 1,393 shares of Potash common stock based on material, non-public information through two Spain-based brokerage accounts. Cañas liquidated his entire CFD position in Potash following the August 17, 2010 public announcement for an illicit profit of $917,239, and Marín sold his stock for net trading profits of $43,566.
The settlement was approved yesterday by Judge Valerie E. Caproni of the United States District Court for the Southern District of New York.
Cañas agreed to the entry of a final judgment ordering him to pay $960,806, the amount of the trading profits reaped by both Cañas and Marín, and a $960,806 civil penalty. Without admitting or denying the SEC’s allegations, he agreed to be permanently enjoined from future violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder.
The SEC’s litigation continues with respect to Marín.