Sept. 28, 2016
FOR IMMEDIATE RELEASE
Washington D.C. — The Securities and Exchange Commission today charged two lawyers and a brokerage firm manager in Peru with insider trading prior to the merger of two mining companies.
The SEC alleges that Nino Coppero del Valle, who worked at Canadian-based HudBay Minerals Inc., tipped his close friend and fellow attorney Julio Antonio Castro Roca with material nonpublic information about a tender offer his company submitted to acquire the shares of Augusta Resource Corp., whose principal business involved a copper mine near Tucson, Arizona. Castro allegedly traded on the inside information through a brokerage account held by a shell company he set up in the British Virgin Islands in an attempt to avoid having the trades traced back to him and Coppero. According to the SEC’s complaint, Castro and Coppero made more than $112,000 in illicit profits from these unlawful trades.
The SEC further alleges that Coppero tipped an acquaintance Ricardo Carrion when seeking his advice about making illegal trades untraceable. According to the SEC’s complaint, Carrion exploited the inside information and caused his brokerage firm to purchase Augusta Resource shares ahead of the tender offer announcement. Carrion’s firm obtained $73,000 in alleged profits.
“As alleged in our complaint, Coppero breached his duty to his employer by tipping Castro and Carrion in advance of any public announcement about HudBay’s impending tender offer,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office. “Try as they might, overseas traders shouldn’t presume they can cover their tracks to avoid detection and scrutiny from U.S. law enforcement when they violate insider trading laws.”
The SEC’s complaint charges Coppero and Castro with violating the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. Coppero, Castro, and Carrion are charged with violating the prohibitions against trading ahead of the announcement of a tender offer contained in Exchange Act Section 14(e) and Rule 14e-3. The complaint seeks disgorgement of ill-gotten gains plus interest and penalties among other things.
The SEC’s investigation is continuing. It is being conducted by Jorge G. Tenreiro and Thomas P. Smith Jr. of the New York office. The litigation will be led by Preethi Krishnamurthy and Mr. Tenreiro. The case is being supervised by Sanjay Wadhwa. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.