NEW YORK, July 18 A former Banco Santander SA executive will pay $1.92 million to settle a U.S. lawsuit accusing him of insider trading ahead of a proposed 2010 takeover of Potash Corp of Saskatchewan Inc by mining group BHP Billiton Ltd.
The deal with Cedric Cañas Maillard, a former adviser to Banco Santander's chief executive, was disclosed on Friday by Securities and Exchange Commission lawyer Timothy Leiman in a teleconference at the federal court in New York.
Cañas agreed to pay $960,806 in penalties and give up an equal amount in improper gains. The settlement requires approval by U.S. District Judge Valerie Caproni.
The judge froze $3.84 million of Cañas' assets in April, three months after he was acquitted of criminal charges in Spain.
Jonathan Buck, a lawyer at Perkins Coie representing Cañas, did not immediately respond to a request for comment.
In its lawsuit filed last July, the SEC said Cañas learned on Aug. 5, 2010, that Santander was helping Anglo-Australian company BHP Billiton Ltd prepare a bid for Potash and tipped co-defendant Julio Marín Ugedo, a friend in Spain who is also a former judge.
The SEC said Cañas bought the equivalent of 30,000 Potash shares through contracts-for-difference (CFD), a leveraged security not traded in the United States, while Marín bought 1,393 Potash shares.
These bets paid off when Potash shares jumped more than 25 percent on Aug. 17, 2010, although the Saskatoon-based company had that day rejected BHP Billiton's $38.6 billion bid.
Marín was also sued by the SEC, and has not responded to the lawsuit. Leiman said on Friday that the SEC was hiring local counsel in Spain to serve the complaint.
Canada ultimately blocked the Potash takeover on the ground that it did not provide a "net benefit" to the country.
The case is SEC v. Cañas Maillard et al, U.S. District Court, Southern District of New York, No. 13-05299. (Reporting by Nate Raymond in New York. Editing by Andre Grenon)