A former officer of Dow Chemical Co (DOW.N) has been charged by securities regulators in connection to an insider trading scheme based on Dow's 2008 acquisition of Rohm & Haas Co.
Mack Murrell, formerly the Vice President of Information Systems at Dow, was among three charged with insider trading in a civil complaint filed on Monday by the U.S. Securities and Exchange Commission.
The SEC alleged that Murrell, his long-time friend and a broker participated in a scheme that generated more than $1 million in illicit profits based on confidential information relating to the acquisition of Rohm.
Murrell, of Saginaw, Michigan, learned about the acquisition before it became public from his then live-in girlfriend, now his wife, who was the administrative assistant to Dow's chief financial officer, according to the SEC.
After learning about the deal, the SEC alleged that Murrell tipped his friend, David Teekell who in turn tipped his broker, Charles Adams at Raymond James Financial Services Inc.
Teekell, of Tomball, Texas, and Adams, of Conroe, Texas, purchased stock and call options in Rohm leading up to Dow's announcement of the deal on July 10, 2008, the SEC said.
Without admitting or denying the allegations, Teekell agreed to settle the case and pay approximately $1.1 million in disgorgement, prejudgment interest and a penalty, the SEC said.
None of the defendants could be reached for comment.
The case is Securities and Exchange Commission v. Mack Murrell, et al, U.S. District Court, Eastern District of Michigan, 13-12856.
(Reporting by Andrew Longstreth in NEW YORK; Editing by Michael Urquhart)