A judge has frozen the assets of two French citizens accused of insider trading.
Nicolas Patrick Benoit Condroyer and Gilles Robert Roger, who reside in Belgium, allegedly used insider information to illegally trade stock in Chattem Inc.
Chattem, a manufacturer of over-the-counter health care products, was recently acquired by Sanofi-Aventis, one of the world’s largest health care products companies.
The SEC alleges that Nicolas Patrick Benoit Condroyer and Gilles Robert Roger, who reside in Brussels, Belgium, purchased hundreds of “out-of-the-money” call option contracts for stock in Chattem, Inc., which manufactures and markets over-the-counter health care products and whose shares are traded on the New York Stock Exchange. Condroyer and Roger purchased the contracts in newly-opened U.S. option brokerage accounts while in possession of material, nonpublic information regarding the impending acquisition of Chattem by Sanofi-Aventis, one of the world’s largest health care products companies.
According to the SEC’s complaint in the case, when the $1.9 billion acquisition was announced publicly on December 21, Condroyer and Roger immediately sold all of their options for illicit profits of approximately $4.2 million. The SEC filed insider trading charges against them the very next day.
“These two men tried to take advantage of the marketplace and cash in on millions of dollars in illegal trades,” said William P. Hicks, Regional Trial Counsel in the SEC’s Atlanta Regional Office. “Fortunately they were caught in the act and the money was successfully frozen.”
The court order has frozen the $4.2 million and prohibited the two traders from destroying evidence.
The fatal mistake of these two? They used newly opened brokerage accounts and made no other trades. That obviously set off the automated alerts at the exchanges and the SEC.