The Securities and Exchange Commission leveled insider trading charges against a Perot Systems investment firm employee for taking home $8.6 million in allegedly illicit profits just days after Dell's $3.9 billion acquisition of the services company.
Reza Saleh, who works for Perot Systems (PER) investment firm Parkcentral Capital Management, bought a number of large call options contracts on Perot Systems beginning two weeks prior to the deal. Call options give the buyer the right to purchase a stock at a specific price and a specific future date.
Saleh sold all of his call options off immediately following Dell's (DELL, Fortune 500) announcement on Monday. The SEC said the options grew larger and larger as the announcement of the deal grew closer.
The SEC identified Saleh as a suspicious trader shortly after he sold off all of the options. Furthermore, Saleh admitted to the SEC that he was aware of the impending deal when he bought the options, according to SEC documents.
"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 SEC is seeking an emergency freeze of Saleh's assets.