Federal regulators claim that three men used insider information to profit illegally from Arch Coal’s acquisition of International Coal Group.
Frank Tamayo schemed with two other men to generate more than $5.6 million in profits from 13 mergers and acquisitions, the U.S. Securities and Exchange Commission says in a lawsuit.
One of the transactions described in the complaint involves Arch Coal’s acquisition of Scott Depot, West Virginia-based International Coal Group in spring 2011. It says the men received information from a source inside Simpson Thacher after ICG sent a draft merger agreement to Arch Coal and the law firm. Nine days later, on April 29, 2011, Tamayo purchased 40,000 shares of ICG stock. After Arch Coal announced that it would purchase ICG on May 2, Tamayo began selling shares. He made $135,052 in illegal profits from the coal transaction, according to the complaint. In total, the scheme generated $231,276 in illegal profits from the ICG acquisition, it says.