SEC Eyes Trading Before Merger
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
The Securities and Exchange Commission is investigating the purchase of call options in Glamis Gold, Ltd. several days before the announcement that Goldcorp, the Canadian mining concern, was acquiring it for $8.6 billion late Wednesday.
What caught the attention of investigators was the unusually high number of options contracts traded in Glamis Gold just before the announced acquisition, a regulatory source told The New York Sun.
The price of those options rose sharply yesterday when Glamis shares, in reaction to the merger news, surged $7.26, or 18.6%, to a close of $46.12. Glamis options contracts rose by more than 500% during the same period.
SEC investigators are looking into the matter; a spokesman at the agency declined to comment, citing policy.
