US SEC investigating insider trading ahead of GSK bid for CNS
UK-headquartered pharmaceutical major GlaxoSmithKline's recent $566.0 million offer to acquire US firm CNS Inc (Marketletter October 16) has sparked a Securities and Exchange Commission investigation regarding insider trading in call options of CNS prior to the announcement, according to a report from Reuters.
This states that the SEC alleged that, between September 27 and October 2, unknown purchasers bought 1,186 out-of-money CNS call option contracts - or about 67%-100% of the trading volume in the various CNS options series on those days. Reuters adds that the district judge for the Eastern District of Pennsylvania has ordered $655,000 in proceeds from the sale of CNS options to be frozen.
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