SEC a sloth on crime? Not in this case
The Securities and Exchange Commission, forever criticized for being too slow to ferret out Wall Street crime, reacted with lightning speed this week to signs of insider trading ahead of a big merger deal.
The agency today charged a Texas man with illegally reaping $8.6 million by buying option contracts of Perot Systems Corp. before Dell Inc. announced its takeover of the firm on Monday, then dumping them.
The defendant, Reza Saleh, works for Perot Investments Inc. and Parkcentral Capital Management, private firms affiliated with Perot Systems. Parkcentral is the investment firm of H. Ross Perot, who isn't implicated in the case.
According to a complaint filed on Wednesday with the federal court in Dallas, Saleh, 53, bought 9,332 call option contracts on Perot through two TD Ameritrade brokerage accounts between Sept. 4 and Sept. 18, after learning about merger talks through his employment.
The SEC said the Richardson, Texas resident sold the contracts after the $3.9 billion takeover was announced on Monday, resulting in the illicit profit.
"What's significant here, clearly, is the amount of money," said Rose Romero, regional director for the SEC's office in Fort Worth, Texas, in an interview. "It's incredible. It's a lot of money for a single individual to realize."
Saleh did not immediately return a call seeking comment, Reuters said.
News reports on Monday noted that trading in Perot Systems options contracts had surged before the deal was announced, suggesting that someone had been tipped off.
Nothing like calling attention to yourself by buying in bulk . . .
-- Tom Petruno