UPDATE 1-Chilean in $13.2 mln insider trading accord with U.S. regulators
(Adds comments from defense lawyers)
By Nate Raymond
NEW YORK Oct 23 (Reuters) - A former board member of Chile's CFR Pharmaceuticals SA has reached a $13.2 million settlement to resolve charges by a U.S. regulator that he engaged in insider trading ahead of Abbott Laboratories' $2.9 billion acquisition of the drug company.
The U.S. Securities and Exchange Commission, in papers filed on Friday in Manhattan federal court, said the settlement would be paid by a British Virgin Islands entity through which Juan Cruz Bilbao Hormaeche of Chile conducted the alleged insider trading.
The SEC also agreed to drop charges against a business associate of Bilbao, Tomas Andres Hurtado Rourke. The SEC had said Hurtado placed the trades on Bilbao's behalf in an account of the British Virgin Islands entity, Somerton Resources Limited. He also personally made trades in his own brokerage account, the agency said.
The trading took place after Bilbao participated in a March 2014 meeting via telephone in which CFR's board considered a confidential proposal by Abbott to buy the company.
The announcement by Abbott days later of an agreement to buy CFR in a $2.9 billion deal enabled Bilbao and Hurtado to reap about $10.6 million in illicit profits, the SEC said.
The SEC filed its lawsuit in December against Bilbao, the president of banking and insurance company Consorcio Financiero SA, and Hurtado, who like Bilbao is a Chilean citizen living in Santiago.
The SEC subsequently obtained a court order freezing $42.8 million of Bilbao's and Somerton's assets. Continuación...