SEC Alleges Insider Trading in Onyx Pharmaceuticals, Inc. Buyout Bid
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The Securities and Exchange Commission on Friday accused unnamed traders of raking in approximately $4.6 million in potentially illegal profits by using foreign accounts to trade on inside knowledge of a buyout offer for drugmaker Onyx Pharmaceuticals. Onyx said Sunday that it rejected an offer from Amgen to buy it for $120 per share because it "significantly undervalued" the company. Onyx said it would seek other suitors. The $120 offer price represented a 38% premium to Onyx's closing price on Friday, and the stock spiked more than 50% after the rejection was made public. The SEC said in a complaint filed in the U.S. District Court for the Southern District of New York that certain traders caused a "highly suspicious" spike in the volume of Onyx call options in the three trading days before the buyout offer was made public.
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The Securities and Exchange Commission on Friday accused unnamed traders of raking in approximately $4.6 million in potentially illegal profits by using foreign accounts to trade on inside knowledge of a buyout offer for drugmaker Onyx Pharmaceuticals. Onyx said Sunday that it rejected an offer from Amgen to buy it for $120 per share because it "significantly undervalued" the company. Onyx said it would seek other suitors. The $120 offer price represented a 38% premium to Onyx's closing price on Friday, and the stock spiked more than 50% after the rejection was made public. The SEC said in a complaint filed in the U.S. District Court for the Southern District of New York that certain traders caused a "highly suspicious" spike in the volume of Onyx call options in the three trading days before the buyout offer was made public.
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