U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23660 / September 29, 2016
Securities and Exchange Commission v. Nino Coppero del Valle et al., Civil Action No. 16-Civ.-7591 (RWS) (S.D.N.Y.)
SEC Files Insider Trading Charges Against Peruvian Traders Using Overseas Accounts
On September 28, 2016, the Securities and Exchange Commission charged two lawyers and a brokerage firm manager in Peru with insider trading prior to the merger of two mining companies.
The SEC alleges that Nino Coppero del Valle, who worked at Canadian-based HudBay Minerals Inc., tipped his close friend and fellow attorney Julio Antonio Castro Roca with material nonpublic information about a tender offer his company submitted to acquire the shares of Augusta Resource Corp., whose principal business involved a copper mine near Tucson, Arizona. Castro allegedly traded on the inside information through a brokerage account held by a shell company he set up in the British Virgin Islands in an attempt to avoid having the trades traced back to him and Coppero. According to the SEC's complaint, Castro and Coppero made more than $112,000 in illicit profits from these unlawful trades.
The SEC further alleges that Coppero tipped an acquaintance, Ricardo Carrion, when seeking his advice about making illegal trades untraceable. According to the SEC's complaint, Carrion exploited the inside information and caused his brokerage firm to purchase Augusta Resource shares ahead of the tender offer announcement. Carrion's firm obtained $73,000 in alleged profits.
The SEC's complaint charges Coppero and Castro with violating Section 17(a) of Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 issued thereunder. Coppero, Castro, and Carrion are charged with violating the prohibitions against trading ahead of the announcement of a tender offer contained in Exchange Act Section 14(e) and Rule 14e-3. The complaint seeks disgorgement of ill-gotten gains plus interest and penalties, among other things.
The SEC's investigation is continuing. It is being conducted by Jorge G. Tenreiro and Thomas P. Smith Jr. of the New York office. The litigation will be led by Preethi Krishnamurthy and Mr. Tenreiro. The case is being supervised by Sanjay Wadhwa. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.