* SEC says options trading led to 14,200 pct return
* Trades believed tied to Canary Islands, Beirut
* SEC says Citigroup, Barclays accounts used
By Jonathan Stempel
July 3 (Reuters) - The U.S. Securities and Exchange Commission has filed a lawsuit accusing unnamed defendants of insider trading in Onyx Pharmaceuticals Inc call options before the drugmaker publicly rejected a takeover bid by larger rival Amgen Inc and put itself up for sale.
In a complaint filed on Wednesday with the U.S. District Court in Manhattan, the SEC said the "highly suspicious" trades took place between June 26 and 28, and resulted in a profit of about $4.6 million on a $305,000 investment. The SEC said this equated to a return of about 14,200 percent.
An emergency court order freezing the assets of the traders was entered on Wednesday, the SEC said.
On June 30, Onyx rejected as inadequate a $10 billion unsolicited takeover bid from Amgen that valued it at $120 per share, 38.2 percent above Onyx's closing price the prior Friday, but said it would consider other potential acquirers. Shares of Onyx soared more than 51 percent on July 1.
The SEC believes the defendants bought the options while possessing material nonpublic information about the Amgen offer, and seeks to recover illegal profits and impose civil fines.
It said the traders used omnibus accounts at Citigroup Global Markets and Barclays Capital, and believes the traders or the accounts are in Canary Islands and Beirut.
Amgen spokeswoman Christine Regan and Onyx spokeswoman Danielle Bertrand could not immediately be reached for comment. Citigroup spokeswoman Danielle Romero-Apsilos declined to comment. Barclays spokesman Mark Lane was not immediately available for comment.
Call options give investors who expect a share price to rise the right to buy stock at a pre-set price. Options can result in large gains or losses relative to the sums invested.
On Monday, Reuters reported a jump in Onyx options trading during the prior week Onyx is based in South San Francisco, California, and Amgen in Thousand Oaks, California.
A study conducted for Reuters by Schaeffer's Investment Research found that options trading activity often rises ahead of news about merger activity, stock repurchases or investments.
In February, the SEC won a freeze on a Swiss account linked to suspicious trading in H.J. Heinz Co call options before the ketchup maker was bought by Warren Buffett's Berkshire Hathaway Inc and Brazilian firm 3G Capital.
The case is SEC v. One or More Unknown Traders in the Securities of Onyx Pharmaceuticals Inc, U.S. District Court, Southern District of New York, No. 13-04645.