(Adds Intel statement)
By Jonathan Stempel
NEW YORK, March 23 Two Israeli residents have
been charged by the U.S. Securities and Exchange Commission with
insider trading in Mobileye NV before the maker of
sensors and cameras for driverless vehicles agreed to be
acquired by Intel Corp for $15.3 billion.
According to a complaint filed on Thursday in U.S. District
Court in Manhattan, Ariel Darvasi and Amir Waldman made
"remarkably timed" purchases of Mobileye shares and call options
prior to the March 13 merger announcement.
The SEC said the purchases resulted in about $427,000 of
profit for Darvasi and $4.5 million for Waldman, after the
announcement caused shares of Jerusalem-based Mobileye to rise
28.2 percent in one day.
According to the SEC, both defendants were connected to
Mobileye insiders through the scientific academic community at
the Hebrew University of Jerusalem, which developed Mobileye
technology and produced at least 11 Mobileye directors and
Darvasi, of Mevasseret Zion, Israel, is a genetics professor
at the university, while Waldman, of Yarqona, Israel, is a
self-employed engineer, the SEC said.
It was unclear whether Darvasi and Waldman have hired
lawyers. Darvasi did not immediately respond to an email request
for comment after normal business hours in Israel. Waldman could
not immediately be reached for comment.
Neither Mobileye nor Santa Clara, California-based Intel was
accused of wrongdoing. Mobileye did not immediately respond to
requests for comment. Intel declined to comment.
Reuters obtained a filed copy of the complaint, which was
not immediately available in online court records.
U.S. District Judge Richard Berman in Manhattan on Thursday
temporarily froze the defendants' assets in two accounts at
Interactive Brokers LLC, finding "a basis to infer" they
violated U.S. insider trading laws, court records show.
The SEC said Waldman conducted most of his Mobileye trading
in the six weeks before the merger was announced, starting on
the day Intel and Mobileye signed a non-disclosure agreement,
and generated a 1,883 percent return.
Darvasi began buying Mobileye stock on March 2 after selling
40,000 shares of Teva Pharmaceutical Industries Ltd,
the only securities in his account, the SEC said.
The case is SEC v Darvasi et al, U.S. District Court,
Southern District of New York, No. 17-02088.
(Reporting by Jonathan Stempel in New York; Additional
reporting by Ankur Banerjee in Bengaluru; Editing by Dan Grebler
and Leslie Adler)