U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23048 / July 22, 2014
Securities and Exchange Commission v. Cedric Ca±as Maillard, et al., Civil Action No. 13-cv-5299 (VEC) (S.D.N.Y.)
Spanish Trader Agrees to Pay Disgorgement and a Penalty to Settle Insider Trading Case
The Securities and Exchange Commission today announced that Cedric Ca±as Maillard, a Spanish citizen and former high-ranking official at Madrid-based Banco Santander, S.A., has agreed to pay almost $2 million to settle charges that he traded on inside information in advance of a public announcement about a proposed acquisition for which the Spanish investment bank was acting as an adviser.
The SEC's Complaint, filed in July 2013, alleged that Ca±as, who served as an executive advisor to Banco Santander's CEO, learned confidentially that the investment bank had been asked by one of the world's largest mining companies, BHP Billiton, to advise and help underwrite its proposed acquisition of Potash Corporation, one of the world's largest producers of fertilizer minerals. In the days leading up to a public announcement of BHP's bid, Ca±as purchased Potash contracts-for-difference (CFDs), which were highly leveraged securities not traded in the U.S. but based on the price of U.S. exchange-listed Potash stock. The CFDs mirrored the movement and pricing of that stock. Ca±as also tipped his close personal friend Julio Marn Ugedo about the potential acquisition and advised him to purchase Potash stock.
The SEC's Complaint alleged that Ca±as purchased 30,000 Potash CFDs from August 9 to August 13, 2010 based on material, non-public information he learned about BHP's offer to acquire Potash. Marn purchased 1,393 shares of Potash common stock based on material, non-public information through two Spain-based brokerage accounts. Ca±as liquidated his entire CFD position in Potash following the August 17, 2010 public announcement for an illicit profit of $917,239, and Marn sold his stock for net trading profits of $43,566.
The settlement was approved yesterday by Judge Valerie E. Caproni of the United States District Court for the Southern District of New York.
Ca±as agreed to the entry of a final judgment ordering him to pay $960,806, the amount of the trading profits reaped by both Ca±as and Marn, and a $960,806 civil penalty. Without admitting or denying the SEC's allegations, he agreed to be permanently enjoined from future violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder.
The SEC's litigation continues with respect to Marn.
The SEC's enforcement action against Ca±as and Marn arose from its investigation into suspicious Potash trading ahead of the August 17, 2010 public announcement of BHP's acquisition bid. Another former Banco Santander analyst, Juan Jose Fern¡ndez Garca, previously agreed to pay more than $625,000 to settle insider trading charges by the SEC.
The SEC's investigation has been conducted jointly by staff in the Enforcement Division's Market Abuse Unit and the Chicago Regional Office, including Kathryn A. Pyszka, Frank D. Goldman, and R. Kevin Barrett. The litigation is being handled by Robert M. Moye, Timothy Leiman, and Mr. Goldman. The Market Abuse Unit is led by Daniel M. Hawke. The SEC appreciates the assistance of the Spanish Comisi³n Nacional del Mercado de Valores, the Financial Industry Regulatory Authority, and the Luxembourg Parquet Economique et Financier and Commission de Surveillance du Secteur Financier.
For further information, see Press Release No. 2013-138.