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SEC Obtains Asset Freezes Within Days of Alleged Insider Trading by Three Swiss Entities


Washington, D.C., July 18, 2011 – The Securities and Exchange Commission today announced that it has obtained asset freezes and other emergency relief against three Swiss-based entities it has charged with insider trading ahead of a July 11 public announcement that Swiss-based Lonza Group Ltd would be acquiring Connecticut-based Arch Chemicals Inc.

According to the SEC’s complaint filed on July 15 within days of the alleged insider trading, Compania International Financiera S.A., Coudree Capital Gestion S.A., and Chartwell Asset Management Services purchased more than a million common shares of Arch between July 5 and July 8, mostly in accounts based in London, England.  Immediately after the acquisition announcement on July 11, the firms began selling the recently-purchased shares of Arch common stock for millions of dollars in profits. 

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According to the SEC’s complaint, at the time the three entities purchased their Arch shares, they are believed to have been in possession of material, non-public information about Lonza’s proposed acquisition of Arch.

“The SEC’s swift action to secure a judicial freeze order only four days after the observation of suspicious trading prevented millions of dollars from moving offshore,” said Robert Khuzami, Director of the SEC’s Division of Enforcement.

In filing its complaint in U.S. District Court for the Southern District of New York, the SEC requested emergency relief noting that because the defendants are foreign entities and placed their trades in overseas accounts, there was a substantial risk that, upon clearance at U.S. brokerage firms, the proceeds of the trades would likely be transferred overseas. 

The Honorable P. Kevin Castel, acting as emergency judge, granted the SEC’s requested relief late in the day on July 15. Among other things, the court’s order froze certain assets of the defendants and ordered repatriation of all assets obtained from the trading described in the SEC’s complaint. The court has scheduled a preliminary injunction hearing in this matter for July 25 at 10 a.m. ET.  The case has been assigned to the Honorable Denise L. Cote. 

The SEC’s investigation was conducted by Assistant Regional Director Silvestre A. Fontes, Assistant Regional Director Sandra Bailey, and Senior Counsel Thomas J. Rappaport with assistance from the Division of Enforcement’s Market Abuse Unit headed by Daniel M. Hawke.  The litigation will be conducted by Michael D. Foster. The SEC acknowledges the assistance of the FINRA Office of Fraud Detection and Market Intelligence in its investigation.

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For more information about this enforcement action, contact:

David P. Bergers
Regional Director, Boston Regional Office
(617) 573-8927



Modified: 07/18/2011