Business IdeasSEC probes 9 deals for insider-trading violations
As many as nine transactions, including Pfizer"s takeover of Wyeth Corp and Merck & Co"s buying of Schering-Plough Corp, are under investigation by the US regulator Securities and Exchange Commission (SEC) for possible insider-trading violations, says a media report.
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Attributing to people familiar with the matter, The Wall Street Journal said that Pfizer"s takeover of Wyeth and Merck & Co"s acquisition of Schering-Plough Corp, are two of at least nine transactions under investigation by the SEC for possible insider-trading violations.
The WSJ had last week said that the SEC, which is looking at whether deal advisers and traders illegally shared confidential information, had sent about three dozen subpoenas (direction issued by court demanding the presence of witness to testify) to hedge funds and brokerages.
In addition to the Pfizer and Merck transactions, the SEC is probing drug maker Abbott Laboratories" acquisition of medical-equipment maker Advanced Medical Optics and pharma firm Eli Lilly & Co"s acquisition of biotechnology company ImClone Systems, the report said citing sources.
The investigations are part of an effort to better understand how people meet and communicate with one another— and swap information—among banks and Wall Street trading floors.
Many firms — Pfizer, Merck, Wyeth, Eli Lilly & Co and Abbott Laboratories, which are under investigation by SEC have significant presence in India.
The inquiries go beyond drug-company deals.
The WSJ said the SEC is asking questions about trading around retailer Best Buy Co"s 2008 acquisition of digital- music service Napster, investment firm Triarc Cos" purchase of hamburger chain Wendy"s International, and software maker Ansys"s takeover of Ansoft Corp.
According to the publication, other transactions named in the SEC subpoenas include retailer Sears Holdings Corp"s aborted pursuit of Restoration Hardware, and the privatization of nursing-home operator Genesis HealthCare Corp by private- equity firms Formation Capital and JER Partners. Those deals date back to 2007.
The SEC is looking at when traders, bankers and others held meetings either in person or over the phone, and how those meetings coincided with progress in deal talks and the timing of trades, the report noted.
However, it is not clear whether the subpoenas are related to the insider-trading case unveiled in October involving New York hedge fund Galleon Group.