SEC Freezes the Assets of Badin Rungruangnavarat for Insider Trading Before Smithfield Foods Acquisition Announcement

SEC v. Badin Rungruangnavarat, Case No. 13-cv-4172 (N.D. Il.).  On June 6, 2013, the SEC announced it obtained an emergency order freezing the assets of Badin Rungruangnavarat who is in Bangkok, Thailand.  The SEC alleges that Rungruangnavarat bought out-of-the-money Smithfield call options and single-stock futures in an account at a broker-dealer before the public announcement that China-based Shuanghui International Holdings agreed to acquire Smithfield for $4.7 billion.  After the announcement, Smithfield’s stock price soared.  According to the SEC, Rungruangnavarat
allegedly made these purchases based on inside information about the potential acquisition.  One potential source was a Facebook friend who is an associate director at an investment bank to a different company that was considering an acquisition of Smithfield.  The SEC alleges that after the announcement, Rungruangnavarat tried to withdraw more than $3 million in profits from his account on June 3, 2013.  The SEC obtained the emergency asset freeze on June 5.  The SEC’s complaint alleges that Rungruangnavarat violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.  In addition to the emergency relief, the SEC is seeking disgorgement, civil monetary penalties, and injunctive relief.

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