Thai investor settles insider-trading case with US SEC

According to a statement by the SEC released late on Thursday, Badin, whose US brokerage account was frozen in an SEC emergency action in June, has agreed to pay US$5.2 million (Bt168 million) to settle charges that he traded on inside information in advance of a public announcement about a proposed acquisition of Smithfield Foods by a firm in China.

The SEC obtained the asset freeze on June 5 after filing a complaint alleging that Badin made more than $3 million in illicit profits just days earlier by insider trading in Smithfield securities.  

Badin loaded up on out-of-the-money Smithfield call options and single-stock futures contracts in the week leading up to a May 29 public announcement about the proposed sale of Smithfield Foods to Shuanghui International Holdings.  

Among his possible sources of material, non-public information about the impending deal was a Facebook friend who was an associate director at the investment bank for a different company that was considering a Smithfield acquisition.  

The settlement was approved by Judge Matthew Kennelly of the US District Court for the Northern District of Illinois.

“Our quick action in June to stop Badin’s insider-trading profits from leaving the US made this multimillion-dollar settlement possible,” said Daniel Hawke, chief of the SEC enforcement division’s market abuse unit. “Once he was denied access to his trading account, Badin elected to forfeit all of his ill-gotten proceeds plus pay a $2-million penalty to settle the case against him.”

Badin agreed to the entry of a final judgement ordering him to pay $3.2 million in disgorgement and the $2-million penalty.  

Without admitting or denying the SEC’s allegations, he agreed to be permanently enjoined from future violations of the relevant sections of the US Securities Exchange Act of 1934 and other regulations.