(September 20, 2011) — The Securities and Exchange Commission (SEC) has filed a lawsuit alleging insider trading relating to the recent purchase of US underwater oil services company Global Industries Ltd by France’s Technip SA, Reuters has reported.
The complaint, obtained by Reuters, alleged that the unnamed defendants purchased Global Industries shares on the days immediately before Technip said it would purchase the company. This “suggests that the information was obtained as a result of breaches of fiduciary duty,” the SEC asserted, seeking to force the defendants to surrender their allegedly illegal profit and pay civil fines.
Additionally, according to the Wall Street Journal, the securities regulator has issued subpoenas to hedge funds and a range of other trading firms, demanding additional background about specific trades prior to Standard & Poor’s decision to lower the country’s rating to AA-plus from AAA on August 5. SEC officials are investigating firms that bet the stock market would sharply fall, the WSJ reported.
The heightened scrutiny over potential insider trader scandals follows investigations conducted late last year, when three hedge funds were raided as part of a probe by the Federal Bureau of Investigation, the Manhattan US Attorney’s office, and the SEC. One scheme impacted was the Missouri State Employees Retirement System, or MOSERS, which had $104 million — 1.4% of its $7.4 billion portfolio — invested with Diamondback Capital Management LLC, one of the fund’s under investigation. MOSERS additionally had an indirect investment of $1.5 million in Level Global Investors LP, another firm that was under investigation managed by Blackstone Alternative Asset Management, MOSERS’ hedge fund consultant.
To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742