SEC alleges insider trading in Onyx buyout bid

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Associated Press

Posted on July 4, 2013 at 1:01 AM

Updated Thursday, Jul 4 at 1:01 PM

NEW YORK (AP) — The Securities and Exchange Commission is accusing unnamed traders of insider trading in Onyx Pharmaceuticals Inc. in the days before the drugmaker publicly rejected a buyout offer from Amgen Inc.

The SEC obtained an emergency court order from a Manhattan federal court to freeze the traders' assets related to transactions in Onyx call options — derivatives that give the holder the right to purchase certain shares at a specified price.

The regulator said the timing and size of trades related to those call options "were highly suspicious because they constituted large increases over the historical volume for those call options purchased."

Onyx said Sunday that it rejected Amgen's offer to buy it out for $120 per share because it "significantly undervalued" the company, and it would seek other buyers.

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