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The Securities and Exchange Commission has frozen the brokerage accounts of unknown traders involved in suspected insider trading in the $3.3bn takeover of Fortress Investment Group, the US-listed private equity firm, by Japan’s Softbank.
The US federal court order affects accounts at Singapore-based Maybank Securities and a London-based futures trading house, R J O’Brien, which the US regulator alleges contains $3.6m in profits made “on their timely purchase and sale of Fortress securities.”
The SEC said all the trades through Maybank were made a within 24-hour period either side of the deal being announced after the market closed on 14 February this year.
The SEC filing said the suspicious trading in accounts at R J O’Brien took place between 10 and 14 February.
“The timing, size and profitability of these trades are highly suspicious,” the SEC said in the court filing.
The complaint added that based on information it received form Fortress, “the consummation of the deal was in serious doubt as late as February 12, 2017.” It added the unnamed defendants at Maybank began buying shares 33 minutes after the Fortress board of directors received an email on the morning of February 14 that included draft resolutions approving the sale to the Japanese company.