SEC Obtains Dismissal of Complaint Without Prejudice Against 3 Swiss Entities in Insider Trading Case
A federal court in New York granted the Securities and Exchange Commission’s (SEC) motion to dismiss without prejudice the its complaint against the defendants in a civil action alleging insider trading.
On July 15, 2011, the SEC filed a complaint charging Compania International Financiera S.A., Coudree Capital Gestion S.A., and Chartwell Asset Management Services, all based in Switzerland, with insider trading.
The complaint, as amended on January 13, 2012, alleged that each of the defendants violated Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder when they traded ahead of a July 11, 2011 public announcement that Swiss-based Lonza Group Ltd. would acquire Connecticut-based Arch Chemicals, Inc. through a tender offer.
The SEC filed papers with the court in February 2012 seeking to dismiss the complaint without prejudice as to defendants Compania and Coudree. Among other things, the Commission’s motion noted that dismissing the complaint without prejudice would “permit the full and complete investigation of the underlying facts by the Commission.”
On May 22, 2012, the court granted the Commission’s motion and dismissed the complaint without prejudice against defendants Compania and Coudree. In granting the motion, the court cited, among other things, the Commission’s inability to obtain critical information during the discovery period, including problems with the discovery process caused in part by the conduct of defendants Compania and Coudree, and the court concluded that the dismissal without prejudice would be in the interest of justice.
The court had previously dismissed the complaint without prejudice as to defendant Chartwell, on February 14, 2012, based on a stipulation by the parties.
The Commission’s investigation is ongoing.