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From Securities Regulation Daily, September 5, 2013
By Amanda Maine, J.D.
The SEC
Background. Smithfield Foods, the world’s largest pork producer and processer, announced on May 29, 2013, that Shuanghui would acquire it for $4.7 billion. According to the SEC, Badin Rungruangnavarat, a resident of Thailand, purchased thousands of Smithfield out-of-the-money call options, which represented a substantial majority of the total cleared volume of those securities through the month of May. He “essentially cornered the market” in Smithfield call options and futures contracts, the SEC alleged. Smithfield stock, on the announcement of the proposed acquisition, increased to $33.35 per share. Rungruangnavarat’s unrealized gains were over $3.2 million, a return of more than 3,400 percent, the SEC alleged in its
Settlement. Rungruangnavarat agreed to settle the matter with the SEC by paying $5.2 million, which includes $3.2 million in disgorgement and a $2 million penalty. He also agreed to be enjoined from future violations of Exchange Act Section 10(b) and Rule 10b-5. Rungruangnavarat did not admit or deny the SEC’s allegations.
The case is No. 13 cv 4172.
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