WASHINGTON (AP) - A federal judge has frozen assets of three Swiss-based investment firms accused of profiting from trades based on inside information about a Swiss company's planned acquisition of a U.S. maker of antibacterial products.
The Securities and Exchange Commission has accused the investment firms of making millions of dollars in trades on confidential information that Lonza Group planned to acquire Arch Chemicals Inc. for $1.2 billion. The trades were allegedly made ahead of the July 11 announcement of the deal.
The SEC said Monday that U.S. District Judge P. Kevin Castel in Manhattan had issued an order blocking Compania International Financiera SA, Coudree Capital Gestion SA and Chartwell Asset Management Services from access to funds. The judge also required that the money from the trades be returned to the United States.
Shares of Norwalk, Conn.-based Arch jumped 12 percent on the day the deal was announced.
Lonza is a Swiss specialty chemicals and biotechnology company. The acquisition will boost its standing in the market for antibacterial products, which is growing steadily and is worth about $10 billion a year, experts say.
Ira Lee Sorkin, an attorney representing Compania International Financiera and Coudree Capital Gestion, said the two firms are contesting the SEC's allegations. The agency's allegation of "suspicious" purchases of stock "does not make for an insider trading case," Sorkin said.
Representatives of Chartwell Asset Management Services couldn't be located.
The SEC had alleged in its civil lawsuit against the three firms that they collectively bought more than 1 million Arch shares between July 5 and July 8. They began selling the shares after the proposed acquisition was announced on July 11, reaping millions in profits, the SEC said.
The firms made the trades through non-U.S. accounts, according to the SEC.
The agency also is seeking unspecified civil fines against the firms and restitution of allegedly illegal trading profits.