The U.S. Securities and Exchange Commission filed insider trading charges on Monday against a manager at Abu Dhabi Oil Refining Co (AORC) who made more than $450,000 profit from suspicious trades before a takeover of Nova Chemicals Corp.
The complaint in U.S. District Court in Manhattan accuses Khaled Mohammed Sharif Al Sayed Al Hashemi of buying 120,000 Nova shares in the two weeks leading up to an announcement that Abu Dhabi-government run International Petroleum Investment Co (IPIC) would acquire Nova Chemicals. At the time, Nova was traded on the New York and Toronto stock exchanges.
The regulator's action follows charges it made last week in a much bigger case involving financier Hazem Khalid Al Braikan of Kuwait and other Gulf firms of having improperly earned millions of dollars from trades in two U.S. firms, Harman International Industries Inc and Textron Inc.
Al Braikan was found dead on Sunday in an apparent suicide.
On Monday, the SEC said that Al Hashemi, an Abu Dhabi government employee, bought the shares through an online brokerage account in the United States at an average price of $1.41 per share. On Feb. 23, the day of the takeover announcement, he sold the shares for an average of $5.24 per share, realizing $458,760 in profits.
Al Hashemi's representatives in the case were not yet known.
The U.S. regulator, which can file civil but not criminal charges, said Al Hashemi sold securities at a loss in order to pay for the purchases of Nova common stock, citing this as evidence of his advance knowledge that the stock would rise significantly.
Al-Hashemi's first known purchases occurred on Feb. 6, within a day or two of IPIC's nonnegotiable cash offer to buy Nova at $6 per share, the complaint said.
Hashemi traded in Nova common stock while in possession of, and on the basis of, material, nonpublic information concerning the IPIC acquisition of Nova, the complaint said.
The SEC said Al Hashemi worked as an information technology manager at AORC, a subsidiary of Abu Dhabi Oil Co owned by the government of Abu Dhabi in the United Arab Emirates. It said he also is, or recently has been, an administration director at the tourism authority in the emirate.
IPIC, which invests in foreign oil and chemical companies, is owned by the Abu Dhabi government. On July 6, Nova and IPIC jointly announced the completion of the takeover for $2.3 billion.
Nova, which has headquarters in Calgary, Alberta, in Canada and offices in Moon Township, Pennsylvania, is a producer of plastics and chemicals.
The SEC is demanding that Al-Hashemi disgorge any ill-gotten gains and pay fines.
The case is Securities and Exchange Commission v Khaled Mohammed Sharif Al Sayed Al Hashemi 09-6650 in U.S. District Court for the Southern District of New York (Manhattan).
(Reporting by Grant McCool; Editing by Phil Berlowitz)