That may have been because Sanchez “wiped his hard drive clean and trashed his laptop,” Hawke claimed. “He was in Spain and there were limitations on what we could do.”
The SEC sued another Spaniard, Juan Garcia, who headed the European equity derivatives division at Banco Santander SA, which advised BHP Billiton Plc in its takeover bid for Potash.
Garcia settled the case by paying $626,033. He neither admitted nor denied wrongdoing. Other than both being residents of Madrid, the SEC “has not demonstrated any other connection” between Sanchez and Garcia, the judge said.
Seeking Fight
U.S. oversight of overseas trading isn’t new. In 2008, for instance, former Dow Jones & Co. director David Li and three other Hong Kong residents paid more than $24 million to settle an SEC probe into trading before the 2007 takeover by News Corp.
Now, the scrutiny is more intense.
“Our view,” said Finra’s Funkhouser, “is that any M&A announcement could lead to leakage anyplace, anywhere in the world.”
Defense attorneys for overseas traders, aware that the SEC’s evidence may be lacking, are increasingly seeking to fight cases rather than settle.
The SEC sued Yonghui Zhang, a Chinese trader accused last year of using inside tips about the takeover of Beijing-based Global Education & Technology Group Ltd -- where his brother is the CEO. Zhang’s lawyers told a judge this month that the SEC has had enough time to investigate. Defense lawyers said in court papers that they are eager to file a dismissal request.
Jerry W. Markham, a law professor at Florida International University and a former chief counsel for the Commodity Futures Trading Commission’s enforcement division, said overseas regulators, while responsive to SEC document requests, usually aren’t as vigilant in fighting insider trading at home.