SEC Alleges Insider Trading in Coal Acquisition
Federal regulators allege in a lawsuit that three men illegally profited from Arch Coal's acquisition of International Coal Group.
The U.S. Securities and Exchange Commission's lawsuit says Frank Tamayo and two other men schemed to generate $5.6 million in profits from several mergers and acquisitions, including $135,052 from the coal companies' merger. The men traded on nonpublic information gleaned from law firm Simpson Thacher & Bartlett.
One transaction involves Arch Coal's acquisition of ICG in 2011. The complaint says nine days after ICG sent a draft merger agreement to the law firm, Tamayo purchased shares of the company's stock. After Arch Coal announced the purchase, Tamayo sold shares, generating illegal profits.
The lawsuit was filed Friday in New Jersey, the same day Tamayo pleaded guilty to federal securities fraud charges.