Chilean businessman Bilbao fined $3.2 million for insider trading
SANTIAGO Nov 26 (Reuters) - Chile's financial regulator said on Thursday it had fined Santiago-based businessman Juan Bilbao Hormaeche some $3.2 million for using insider information to trade shares of drug company CFR Pharmaceuticals SA.
The move came about a month after the U.S. Securities and Exchange Commission reached a $13.2 million dollar settlement with Bilbao after alleging he engaged in insider trading ahead of Abbott Laboratories' $2.9 billion acquisition of CFR.
In accusations similar to those presented by the SEC, Chile's SVS securities regulator said Bilbao acquired 707,222 American Depository Shares of CFR while serving as the company's director.
Bilbao at that time had non-public information about CFR's plans to buy pharmaceutical companies in Thailand and Mexico, as well as information about the negotiations between CFR's majority shareholders and Abbott, the SVS said.
"After a thorough investigation, we found hard evidence of violations of insider trading committed by Mr. Juan Bilbao," said Carlos Pavez, head of the SVS.
According to the SVS, Bilbao reaped about $6.9 million in profits as a result of the transaction in question.
He has five days to appeal the fine.
Chileans have grown increasingly skeptical toward the country's political and business classes, partly due to the uncovering of a high-profile, decade-long toilet paper collusion scheme between Chilean forestry company CMPC and a subsidiary of Swedish-owned SCA.
No criminal charges have been filed in that case. (Reporting by Gram Slattery; Editing by Anthony Esposito and Paul Simao)
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