SEC sues ex-Santander exec, ex-Spanish judge for insider trading

Tue Jul 30, 2013 5:02pm EDT
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* SEC says friends traded on BHP Billiton bid for Potash

* Nearly $1 million in alleged illegal profit

By Jonathan Stempel

NEW YORK, July 30 (Reuters) - The U.S. Securities and Exchange Commission has charged a former Banco Santander SA executive and a former Spanish judge with insider trading over a proposed takeover of Potash Corp of Saskatchewan Inc on which the Spanish bank had given investment banking advice.

In a lawsuit filed on Tuesday in U.S. District Court in New York, the SEC is seeking to recover nearly $1 million of alleged illegal profit by Cedric Cañas Maillard, a former adviser to Banco Santander's chief executive, and Julio Marín Ugedo, the former judge.

According to the SEC, Cañas, 40, had learned on Aug. 5, 2010, that Santander was helping Anglo-Australian mining giant BHP Billiton Ltd prepare a bid for Potash, a fertilizer company based in Saskatoon, Saskatchewan.

The SEC said that Cañas, a Harvard Business School graduate, then tipped the acquisition to Marín, 42, a close friend with whom he had grown up and still talked to by phone, text message or email dozens of times a month.

According to the SEC, Cañas soon bought the equivalent of 30,000 Potash shares through contracts-for-difference (CFD), which are leveraged securities not traded in the United States, and Marín bought 1,393 Potash shares. It said Marín has admitted to discussing Potash with Cañas before making that purchase.

On Aug. 17, 2010, Potash rejected an unsolicited $38.6 billion takeover from BHP Billiton, but the news caused Potash's share price to shoot up more than 25 percent that day.   Continued...