The Securities and Exchange Commission announced the entry of an emergency court order to freeze assets associated with highly suspicious trading by unknown traders in call option contracts of Anadarko Petroleum Corporation.
The SEC’s complaint alleges that unknown traders placed trades through accounts in brokerage and investment banking firms in the UK and Cyprus prior to the April 12, 2019 announcement of Chevron’s planned acquisition of Anadarko at $65 per share, 38% higher than the $46.80 closing price on April 11. Negotiations and due diligence for the acquisition had been underway since February, involving competing offers by two large energy companies. According to the complaint, the defendants purchased 1,650 call options for Anadarko stock between February 8, 2019 and April 1, 2019, and profited by approximately $2.5 million. The SEC alleges that the nature and timing of the call purchases support an inference of highly suspicious trading.
The SEC alleges violations of 15 USC § 78j(b) and 17 CFR §§ 240.10b-5, and seeks a show cause order, an order freezing assets, injunctive relief, disgorgement, and civil penalties pursuant to 15 USC §§ 78u-1.