Hazem al-Braikan, who was sued last week by U.S. regulators over bogus takeover bids, was found dead in an apparent suicide, a security official at the Kuwaiti Interior Ministry said.
The U.S. Securities and Exchange Commission sued al-Braikan along with Al-Raya Investment Co., United Gulf Bank BSC and Kipco Asset Management Co. for allegedly placing “highly profitable and suspicious” trades before newspaper and Internet reports claiming investors planned to buy Textron Inc. and Harman International Industries Inc.
Al-Braikan, 30, was found dead today from a gun-shot wound, said the official, who declined to be identified because the investigation is ongoing. The Kuwait-based financier and firms reaped more than $5 million from the transactions, the SEC said in the lawsuit targeting the traders on July 23.
Al-Arabiya provides the following detail:
“The board … confirms the correctness of these dealings made by the CEO on behalf of the company,” added the company, which is 10 percent owned by Citigroup Inc.
From the SEC filing it is apparant that al-Braikan had not been charged with spreading the false rumours but with profiting from trades made ‘around false news’:
Washington, D.C., July 23, 2009 — The Securities and Exchange Commission today charged a trader located in Kuwait and three related foreign entities for engaging in an illicit scheme through which they reaped millions of dollars in profits when trading around hoax offers to acquire U.S. companies. The SEC has obtained an emergency court order to freeze more than $5 million in trading profits located in various U.S. accounts in their names.
The SEC filed its charges and obtained the asset freeze within days of the latest hoax offer. The SEC alleges that Hazem Khalid Al-Braikan and the related entities traded around false news of a purported tender offer by a Middle East investment group to acquire Harman International Industries. A phony announcement publicizing the hoax offer was faxed to media outlets on Sunday, July 19, and subsequently reported on the Internet. Harman’s share price climbed more than 40 percent in pre-market trading on Monday, July 20.
So, the SEC can act very quickly if it wants to. Was this another one of those pump & dump and naked short selling games going on here?
However, what doesn’t quite add up is that the SEC claims that the Harman’s share price climbed more than 40 percent in pre-market trading.
If I look at the trading data from the NYSE for that week, it looks like this:
It doesn’t look like the share price rose 40% on July 20. On the contrary the press release seems to have stopped a downward trend as the traded volume was very high.
Surely the SEC has better information than I do.