By Jonathan Stempel
(Reuters) -Federal prosecutors on Thursday charged a Pennsylvania man with insider trading for using tips from his domestic partner to engage in illegal trading prior to CVS Health’s $9 purchase last year of primary care provider Oak Street Health .5 billion.
Carlos Sacanell, 58, of Willow Grove, was also charged with lying to the FBI by denying receiving the tips before the acquisition was announced in February 2023. The U.S. Securities and Exchange Commission filed a related civil case against Sacanell.
Authorities said Sacanell generated $617,000 in trading profits in Oak Street stock and options after his partner, a senior Oak Street executive, shared material non-public information about the planned acquisition.
The SEC said the trading began two days after Sacanell’s partner, who had learned that a takeover was in the offing, complained in a text message that it was “very uncomfortable to have information that I cannot share.”
Sacanell texted back that his partner should tell questioning colleagues “you don’t know” what’s going on, the SEC said.
The suspect was arrested Thursday at his home, according to U.S. Attorney Jacqueline Romero’s office in Philadelphia. Sacanell’s partner was not charged.
Zak Goldstein, an attorney for Sacanell, said in an email that he was disappointed with the indictment because there had been “a tremendous amount of public information” about the acquisition. He said Sacanell looks forward to resolving the matter in court.
CVS, the drugstore chain and pharmacy benefits manager, agreed to buy Oak Street for $39 a share, 50% more than where the stock was trading shortly before news of the acquisition became public, the SEC said.
Oak Street’s stock price rose 36% over the next two days, even after CVS announced the acquisition. CVS valued the transaction at $10.6 billion, including debt.
(Reporting by Jonathan Stempel in New York; Editing by Bill Berkrot and Marguerita Choy)
