The Commission's complaint alleges that on Aug. 1 and 2, 2005, the Anticevic account purchased a total of at least 1,997 "out of the money" call option contracts for the common stock of Reebok. Following the acquisition announcement on Aug. 3, 2005, the price of Reebok's common stock rose more than 30 percent from its closing price the prior day. The Anticevic account sold all of the call options after the price rise, realizing profits of over $2.04 million. Also on August 3, shortly after the sale of the options contracts, the brokerage firm received a wire instruction request to transfer approximately $870,000 of the proceeds from the Reebok trades to a bank account maintained in Salzburg, Austria.
Acting on the Commission's request for emergency relief, the United States District Court for the Southern District of New York today issued a temporary restraining order which, among other things, freezes the proceeds of the highly suspicious Reebok trades to prevent the movement of those funds outside of the United States.
Mark K. Schonfeld, the Director of the Commission's Northeast Regional Office, said, "We responded immediately to an attempt to move ill-gotten funds overseas and beyond the reach of U.S. Courts. We will take swift measures against those who seek to diminish the integrity of our markets."
In the pending lawsuit, the Commission alleges that Anticevic engaged in illegal insider trading in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The complaint seeks permanent injunctive relief, the disgorgement of all illegal profits, and the imposition of civil monetary penalties.
See also: Litigation Release
