SEC Charges Thailand-Based Trader with Insider Trading Ahead of Smithfield Foods Acquisition Announcement
Litigation Release No. 24136 / May 7, 2018
Securities and Exchange Commission v. Bovorn Rungruangnavarat, Civil Action No. 18-cv-03196 (N.D.IL. filed May 4, 2018)
The Securities and Exchange Commission today announced insider trading charges against a Thai citizen who worked with his brother to reap millions in illegal gains by trading in advance of the May 2013 announcement that China-based Shuanghui International Holdings (now WH Group) would acquire Smithfield Foods.
The SEC's complaint alleges that in early May 2013, Bovorn Rungruangnavarat coordinated with his brother, Badin Rungruangnavarat, to acquire large volumes of call options, futures, and shares of Smithfield after learning of the potential acquisition from a close, personal friend who worked as an investment banker. According to the complaint, the brothers' purchases were so aggressive that they acquired control over approximately 32.5% of the average daily trading volume of Smithfield stock during May 2013. After the planned acquisition was announced on May 29, 2013, they sold their position for profits of approximately $3.8 million.
The SEC previously charged Badin with insider trading in June 2013. Without admitting or denying the SEC's allegations, Badin settled those charges and agreed to disgorge $3.2 million in illegal trading profits and to pay a $2 million civil penalty. The complaint filed today charges Bovorn with insider trading for additional profits of approximately $560,000.
The SEC's complaint against Bovorn Rungruangnavarat charges him with violating Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. It seeks injunctive relief, disgorgement of the remaining ill-gotten gains, prejudgment interest, and penalties.
The SEC's investigation has been conducted by Frank D. Goldman and James A. Scoggins of the Market Abuse Unit in the Denver Regional Office and R. Kevin Barrett of the Chicago Regional Office. The litigation is being handled by Mark L. Williams. The SEC appreciates the assistance of the Monetary Authority of Singapore and the Securities and Exchange Commission of Thailand.