Insider trading alleged in Chinese firm's acquisition of Smithfield Foods

The agency alleged that Rungruangnavarat made the purchases based on “material, nonpublic information” about the acquisition, which was announced on May 29.

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Investigators are looking at one of Rungruangnavarat's Facebook friends as a possible source of the information. That individual is an associate director at an investment bank to a different company that was exploring an acquisition of Smithfield, according to the SEC.

The commission obtained an emergency court order late Wednesday to freeze the proceeds of Rungruangnavarat's securities purchases. The order grants expedited discovery, and prohibits Rungruangnavarat from destroying evidence.

"The speed in which we were able to bring this emergency action exemplifies the talent, tenacity, and commitment that the SEC staff brings to bear every day to keep our markets fair and investors safe," said Andrew Ceresney, co-director of the SEC's Division of Enforcement.

Rungruangnavarat’s alleged misdeeds allowed him to receive a return on his investment exceeding 3,400 percent.

Smithfield stock rose by 25 percent on the day following the announcement. The Smithfield, Va.-based firm is the world’s largest pork processor.

The deal is the largest-ever acquisition of a U.S. firm by a Chinese company.