A Thailand man reaped more than $3.2 million in profit from trading shares of Smithfield Foods before last week's announcement that they would be acquired by a Chinese firm.
According to USA Today securities regulators are calling the trades "highly suspicious."
Securities and Exchange investigators believe he was possibly tipped off about the acquisition. One possible source is reportedly a former coworker who is now employed at a Thai investment bank advising another firm that was considering acquiring Smithfield.
In a statement, director of the SEC's Chicago office said, "As alleged in our complaint, not only did the defendant trade out of the money Smithfield call options, he further pumped up his profits by purchasing single-stock futures, thereby reaping a total unrealized return on his investment of 3,400% in the span of eight days."
Following the announcement, the price of Smithfield shares opened nearly 25 percent higher than the previous day's closing price.
Source: brownfieldagnews.com