Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, September 24, 2009

SEC Charges Perot Systems Employee with Inside Trading Involving Dell's Tender Offer

The SEC today charged Perot Systems employee Reza Saleh with insider trading around the public announcement of Dell Inc.'s tender offer for Perot Systems earlier this week.  The SEC alleges that Saleh made increasingly large purchases of Perot Systems call options contracts based on material, non-public information that he learned in the course of his employment and, immediately following the tender offer announcement on Monday, September 21, Saleh sold all of the call option contracts in the accounts and reaped approximately $8.6 million in illicit profits.

Later that same morning, SEC staff with assistance from the Options Regulatory Surveillance Authority identified Saleh as a suspicious trader.

The SEC's complaint charges that Saleh violated the anti-fraud provisions of the Securities Exchange Act of 1934, including specific provisions that prohibit trading while in possession of material nonpublic information about tender offers. In addition to seeking an emergency asset freeze, the SEC has sought a preliminary injunction and a final judgment permanently enjoining Saleh from future violations of the relevant provisions of the federal securities laws and ordering him to pay financial penalties and disgorgement of ill-gotten gains with prejudgment interest.  The SEC's complaint also names Amir Saleh of Richardson, Texas, as a relief defendant, in order to recover trading profits he received as a co-account holder on one of Reza Saleh's brokerage accounts.

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