SEC Charges Two Traders in Chile with Insider Trading

February 6, 2015 — People entrusted to serve on a board of directors become aware of sensitive information concerning the company’s business dealings. But trading on that nonpublic information for personal gain is a crime. To fight illegal insider trading, the U.S. Congress set up a whistleblower program as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Tipsters who notify the Securities and Exchange Commission (SEC) about illicit insider trading may be rewarded for their courage in collaborating with the agency. Whistleblowers could receive up to thirty percent of the amount the government recovers based on the informant’s information, provided the amount exceeds $1 million.

Board of Directors Member Used Confidential Information Learned in Meetings to Trade Shares Ahead of an Announcement that Abbott Laboratories Would Acquire CFR Pharmaceuticals S.A.

Two business associates in Chile have been charged with insider trading on confidential information involving CFR Pharmaceuticals S.A. and Abbott Laboratories. One of the two men learned the information while serving on CFR Pharmaceuticals’ board of directors.
Juan Cruz Bilbao Hormaeche allegedly learned in a board meeting that Abbott had made a tender offer for CFR Pharmaceuticals. Bilbao then reportedly used a U.S. brokerage account to cause the purchase of millions of dollars’ worth of CFR Pharmaceuticals shares. Tomás Andrés Hurtado Rourke actually placed the trades for Bilbao in the U.S. account, and at the same time allegedly bought a large number of shares in his own U.S. brokerage account. When news of Abbott’s deal to acquire CFR Pharmaceuticals became public, Bilbao and Hurtado allegedly tendered their shares and made $10.6 million in illicit profits.

Whistleblowers Notify SEC of Insider Trading

While Waters & Kraus is not handling this particular example of insider trading, we are representing whistleblowers in similar qui tam matters. If you have comparable claims against a co-worker or anyone else engaged in insider trading, contact us or call our qui tam attorneys at 855.784.0268 to learn more about our practice and how we can work together to notify the government about fraud and abuse. Our qui tam lawyers, like Michael Armitage and Gary Paul in the firm’s California office, are committed to advancing and protecting informants’ interests in whistleblower lawsuits.

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