The Securities and Exchange Commision says a former employee at Fleets Buenos Aires office let his family in on a little secret last Friday that his ex-company was about to be purchased by Bank of America.
So, Guillermo Garcia Simon and his family poured their money into FleetBoston Securities late Friday, and now face insider trading charges from the SEC, Reuters reports.
Typically, charges like these take months or years to come into fruition, but the proximity to the merger prompted the SEC to file an emergency enforcement action that included halting all trades in and out of Garcia Simons brokerage account. A Massachusetts judge allowed the freeze.
"These circumstances were strong enough to convince a federal judge to issue an order freezing the assets," Juan Marcel Marcelino, district administrator of the SEC's Boston office, told Reuters.
Garcia Simon, his wife and his brother put $11,000 into FleetBoston securities last Friday, though the SEC wouldnt say how, where or even if they knew how the ex-employee got his information about the merger. At the time of the purchases, shares were selling at around $31 each. By the time the deal was announced Monday, that price swelled to $39.20.