A Milner, Ga., resident was found liable for reaping about $500,000 in illegal profits from insider trading connected to Sanofi-Aventis SA’s acquisition of a Chattanooga firm, according to federal authorities.
The U.S. Securities and Exchange Commission said a jury found Peter Doffing illegally profited from a third-hand tip by buying stock ahead of the French company’s 2009 acquisition of Chattem Inc., a Chattanooga company that makes Icy Hot, Gold Bond and other health products.
Shortly before the merger deal was announced, according to the SEC, a board member at Chattem consulted with his accountant about tax issues related to the merger. The accountant then tipped a broker in Griffin, who told Doffing about the coming merger, said the SEC.
Altogether, the SEC charged 12 individuals with insider trading tied to the acquisition. Six people in the U.S. paid more than $390,000 to settle charges, and the SEC said it obtained a court order freezing over $4 million in trading profits of two French citizens living in Belgium.
In its civil case against Doffing, the SEC is asking the court to require him to pay back the trading profits and to impose other penalities. The court’s decision is pending.