Insider Trading Charges in Pennsylvania

By Jonathan Stempel

(Reuters) – Federal prosecutors charged Carlos Sacanell, a 58-year-old from Willow Grove, Pennsylvania, on Thursday with insider trading. He allegedly used tips from his domestic partner to trade illegally ahead of CVS Health's (NYSE:CVS) $9.5 billion acquisition of primary care provider Oak Street Health last year.

Sacanell was also charged with lying to the FBI, denying that he received insider information before the takeover was announced in February 2023. The U.S. Securities and Exchange Commission (SEC) has filed a related civil case against him.

As stated by U.S. Attorney Jacqueline Romero's office in Philadelphia, Sacanell was arrested at home on Thursday. Authorities allege he made $617,000 trading Oak Street stock and options after his partner, a senior executive at Oak Street, shared non-public information regarding the acquisition.

The SEC reported that Sacanell began trading just two days after his partner expressed discomfort about having information that could not be disclosed. In response, Sacanell advised his partner to tell questioning co-workers that they were unaware of the situation.

Sacanell's partner has not been charged in the case. CVS proposed to purchase Oak Street at $39 per share, a 50% premium over the stock's price shortly before the takeover news was made public. Following the announcement, Oak Street's share price surged 36% within two days, with CVS valuing the overall transaction at $10.6 billion, including debt.