(26 August 2010 – USA) An analyst accused of insider trading in the BHP bid for Potash Corp has been suspended from Banco Santander.Juan Jose Fernandez Garcia, head of European Equity Derivative Research at Santander, allegedly made nearly US$576,000 (A$651,600) in illegal profits ahead of BHP’s bid for the Canadian firm Potash, the US Securities and Exchange Commission said.
Santander, who is advising BHP on its unsolicited offer for the firm, said in a statement that it will fully co-operate with SEC’s investigation and that they would also be conducting an internal probe into the allegations.
The bank has acted at all times following the appropriate procedures, the bank said in a statement.
Mr Garcia has been suspended from his job while the investigation is completed, Santander said.
The SEC also said that Luis Martin Caro Sanchez, a Madrid resident who doesn’t work for Santander, allegedly made nearly US$497,000 in illegal profits using the same trading pattern that Mr Garcia used.
The SEC said Mr Garcia and Mr Sanchez purchased hundreds of option contracts for stock in Potash in the days leading up to the announcement of BHP’s bid for Potash last week.
SEC has obtained a court order to freeze the assets of Mr Garcia and Mr Sanchez.
By virtue of his employment at the bank, Mr Garcia would have access to information or people who knew about this deal, Mr Hawke, SEC’s Market Abuse Unit chief said.
Action had to be swift to ensure that profits generated by these transactions weren’t transferred abroad, said Mr Hawke.