The U.S. Securities and Exchange Commission (SEC) on Thursday charged a Perot Systems-affiliated employee with insider trading related to Dell Inc.’s acquisition of Perot.
Reza Saleh, 53, is a resident of Richardson, Texas and an employee of Parkcentral Capital Management, an affiliate of Perot Systems, which was acquired last week by Dell for $3.9 billion. Saleh allegedly reaped illicit profits of $8.6 million on confidential information he had received.
Saleh allegedly bought 9,332 call options via his TD Ameritrade account on Perot Systems weeks prior to the deal becoming public. The options allow traders to purchase stock at a later time at a specified price.
“Immediately following [Dell’s] tender offer announcement on Monday, Sept. 21, Saleh sold all of the call option contracts in the accounts and reaped approximately $8.6 million in illicit profits,” the SEC charged.
“The overwhelming evidence in this case allowed the SEC to move quickly against the trader before he could spend the huge profits from his illegal trading,” said Rose Romero, director of the SEC’s Fort Worth Regional Office, in a statement. “The Commission is seeking a court order to freeze Saleh’s assets.”
The Securities Exchange Act of 1934’s anti-fraud protection prohibits stock trading using insider information.
According to court documents, Saleh obtained information from friends within Perot Systems.
Dell bought the Plano, Texas-based technology services firm Perot Systems to expand its market share in the IT services market and to better compete with International Business Machines, which long ago exited most of the hardware business to focus on IT consulting. Hewlett-Packard Inc. last year purchased Electronic Data Systems to shore up its consulting business.
Perot was founded by former politician and U.S. presidential candidate Ross Perot.
Reza Saleh, 53, is a resident of Richardson, Texas and an employee of Parkcentral Capital Management, an affiliate of Perot Systems, which was acquired last week by Dell for $3.9 billion. Saleh allegedly reaped illicit profits of $8.6 million on confidential information he had received.
Saleh allegedly bought 9,332 call options via his TD Ameritrade account on Perot Systems weeks prior to the deal becoming public. The options allow traders to purchase stock at a later time at a specified price.
“Immediately following [Dell’s] tender offer announcement on Monday, Sept. 21, Saleh sold all of the call option contracts in the accounts and reaped approximately $8.6 million in illicit profits,” the SEC charged.
“The overwhelming evidence in this case allowed the SEC to move quickly against the trader before he could spend the huge profits from his illegal trading,” said Rose Romero, director of the SEC’s Fort Worth Regional Office, in a statement. “The Commission is seeking a court order to freeze Saleh’s assets.”
The Securities Exchange Act of 1934’s anti-fraud protection prohibits stock trading using insider information.
According to court documents, Saleh obtained information from friends within Perot Systems.
Dell bought the Plano, Texas-based technology services firm Perot Systems to expand its market share in the IT services market and to better compete with International Business Machines, which long ago exited most of the hardware business to focus on IT consulting. Hewlett-Packard Inc. last year purchased Electronic Data Systems to shore up its consulting business.
Perot was founded by former politician and U.S. presidential candidate Ross Perot.
