The Securities and Exchange Commission filed a complaint last Thursday alleging insider trading in the purchase of GCI by a Colorado-based company.
The 13-page complaint laid out a timeline of rapid purchases of high-risk GCI stock options two weeks before it was announced the company would be acquired by Liberty Interactive Corporation.
In a filing with the U.S. District Court in southern New York, the SEC said the defendants are one or more un-named stock traders believed to be based in the United Kingdom or Lebanon.
The insider trading charges are connected with the activity of two financial service companies that bought $48,109 worth of GCI stock between March 20th and 31st of 2017. Neither company, UK-based Nomura or Lebanon-based Cedrus had traded GCI stock in the previous six months, according to the filing. When the value of GCI’s stock grew by 62 percent on the day the acquisition was announced, those risky holdings became worth more than $1 million.
In the complaint, the SEC said the “the timing, size, and profitability” of the trades is “highly suspicious,” and it believes non-public information about the proposed sale was exchanged in the lead up.
The SEC declined to comment beyond what was laid out in court documents. Neither Nomura or Cedrus replied to a request for comment. GCI spokesperson Heather Handyside also declined to comment.
The allegations don’t appear to have any effect on GCI customers in Alaska or on the status of Liberty’s acquisition, which is expected to be finalized before the end of the year.
