- The Securities and Exchange Commission believes some fishy trading of Bioverativ Inc. stock occurred leading up to its acquisition by Sanofi SA, and has filed a lawsuit against the alleged perpetrators.
- The lawsuit names as defendants one or more unknown traders of Bioverativ securities. The traders, according to court documents cited by Reuters, made "highly suspicious, timely, and lucrative purchases and sales of options on Bioverativ stock," between mid- and late January that resulted in profits of nearly $5 million.
- In a Jan. 26 court order, Judge John Koeltl of the U.S. District Court for the Southern District of New York determined there were grounds to infer the defendants violated two sections of the Exchange Act.
Sanofi added two marketed hemophilia drugs to its portfolio when it picked up Biogen's spin-off for $11.6 billion earlier this month, yet the real winners of the deal were arguably Bioverativ investors. The offer amounted to $105 per Bioverativ share, reflecting a 64% premium to the biotech's last closing stock price prior to the deal.
While the takeout surely came as a surprise to many of those investors, the SEC is concerned that some used illegal trading tactics to reap the rewards of the acquisition.
In its lawsuit, the agency noted that the trades at issue were done through Credit Suisse accounts in the U.S. and Switzerland. The defendants transferred more than $2.8 million in Bioverativ call option trading proceeds into the accounts around Jan. 23 and Jan. 24.
The SEC asked the U.S. district court to freeze assets related to the allegations and expedite discovery, as well as require the defendants to provide information about their identity and financial accounts; to repatriate any assets obtained through the stock transactions; and refrain from destroying or altering any documents related to the transactions.
Judge Koeltl subsequently deemed the requests appropriate given the evidence presented by the SEC. The defendants have until Jan. 31 to submit opposition papers explaining why the court shouldn't issue a preliminary injunction or levy other penalties against them.