Remember that Reuters report about Samsung buying BlackBerry last month? It sounded logical enough at that time, but as it turns out, it wasn’t true. Still, in the wake of the announcement, stock prices soared for both companies, and now the U.S. Securities and Exchange Commission (SEC) is smalling a rat.
The SEC is investigating a January 14 spike in trading in BlackBerry options that took place just hours before Reuters reported that Samsung Electronics was in talks to buy the beleaguered Canadian smartphone maker, according to sources familiar with the investigation.
In particular, the SEC is looking at a trade that took place at 12:06 p.m. on that day, when there was a purchase of options with the rights to buy 200,000 shares of BlackBerry stock at a strike price of $10 a share, the source revealed. Later that same day, Reuters reported that Samsung had offered to buy BlackBerry for as much as $7.5 billion, valuing its stock at between $13.35 to $15.49 per share, a 38 percent to 60 percent premium over BlackBerrys trading price at the time. BlackBerrys stock, which closed on Jan. 13 at $9.71, shot up 30 percent on the news to close at $12.60 on Jan. 14, its biggest one-day gain in years.
The concern is that someone fed information to Reuters for the sole purpose of making a killing on the stock jump.
In the wake of the original story, Reuters (the source) amended their story to note the discussions on this buyout were between two advisors rather than company execs. No one has been formally accused of wrongdoing, and with insider trading cases often daunting to prove in court, it could stay that way.
