U.S.: Thai trader in Smithfield sale probe

U.S. regulators have obtained a court order freezing the assets of a Thailand-based trader, saying he reaped $3.2 million in illegal profits after getting a tip before the announcement that a Chinese meat company was buying Smithfield Foods Inc.

The Securities and Exchange Commission said yesterday that Badin Rungruangnavarat, 30, may have received the tip from a Facebook friend who once worked for Rungruangnavarat's current employer.

Shuanghui International Holdings, China's largest meat processor, said last week it was buying U.S. pork producer Smithfield for $4.7 billion.

The agency said the friend is an associate director at a Thai investment bank that was advising a Shuanghui rival, Charoen Pokphand Foods Plc, which was also exploring a bid for Smithfield.

The SEC said Rungruangnavarat reaped $3.2 million in profits by trading Smithfield "out of the money" call options and single-stock futures in an account at Interactive Brokers LLC shortly before the announcement.

"Rungruangnavarat essentially cornered the market in Smithfield call options and futures contracts," the SEC said in the complaint.

A spokeswoman for Smithfield declined to comment on the SEC's case.

A spokeswoman at Interactive Brokers also declined to comment, saying it is company policy to not discuss individual customer matters.

The SEC's complaint was filed under seal in U.S. District Court in Illinois on Wednesday.

-- Reuters