The US Securities and Exchange Commission has charged two Israelis with insider trading before the recent $15 billion acquisition of Mobileye by Intel, bringing them jointly a sudden profit of almost $5 million.
According to a Reuters report citing the complaint by the SEC, Ariel Darvasi and Amir Waldman bought Mobileye shares shortly before the company’s purchase by the Silicon Valley-based giant was announced on March 13.
Darvasi made $427,000 and Waldman made $4.5 million from the trades, the SEC said.
According to a complaint filed on Thursday in US District Court in Manhattan by the SEC, both Darvasi and Waldman made their moves suspiciously close to the date when the Mobileye deal was announced.
The Mobileye stock jumped by slightly more than 28 percent in a single day after the buyout was unveiled.
Both Darvasi and Waldman were linked to people inside the company, through their connections from the Hebrew University of Jerusalem, where the technology was first developed, according to the SEC.
Darvasi, of Mevasseret Zion, Israel, is a genetics professor at the university, while Waldman, of Yarqona, Israel, is a self-employed engineer, Reuters quoted the SEC as saying.
At least 11 directors and officers at Mobileye, developer of camera-based road safety technology, hail from the Hebrew University.
Neither of the two Israelis was available for comment and it was not clear whether they hired lawyers. Neither Intel nor Mobileye commented on the charges. The companies are not accused of any wrongdoing.
US District Judge Richard Berman in Manhattan froze the defendants’ assets temporarily in two accounts at Interactive Brokers LLC, finding “a basis to infer” they violated US insider trading laws, court records obtained by Reuters showed.
Waldman, the SEC said, conducted most of his Mobileye trading starting on the day when Mobileye and Intel signed a non-disclosure agreement. He generated a 1,883% return on his stocks.
Darvasi began buying Mobileye stock less than two weeks before the merger was announced, after selling 40,000 Teva shares, the only securities in his account, the SEC said.