July 14, 2006

Merger probe's net wide

Peter Henning, Wayne State law professor, commented about the Securities and Exchange Commission expanding its insider-trading probe of the $21 billion energy merger involving Denver-based Western Gas Resources. The SEC will focus its probe on questionable call-options trades and try to link them to workers at the companies involved in the deal. "In a deal like this, which is more complex than normal with two companies being acquired, that means there's at least three investment banks and at least three law firms," Henning said. "If someone bought an out-of-the-money call option, especially one that would expire in a short period of time, that's going to get the commission's attention in a hurry."

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