In the US, an unknown trader managed to earn approximately $7.5 million by purchasing 100,000 call options (which grant the right to buy shares at a predetermined price with a commission fee) of Equitrans Midstream Corp, a company involved in the construction of the Mountain Valley pipeline. Bloomberg reports this information.
The trader executed the transaction on May 24, a few days before US President Joe Biden announced an agreement with Republicans on the debt ceiling law, which included the resumption of the Mountain Valley pipeline construction. Previously, there had been no information about plans to revive the halted project.
The fact that the trader bet on the rise of Equitrans shares, which had fallen by 35% last year and then surged by 49% following the debt ceiling decision, may indicate insider information leakage, according to Bloomberg.
“The investigators’ task is not only to find out if the information was transmitted but also to reveal the intentions with which it was transmitted,” said Philip Kinda, the head of enforcement practice at the Securities and Exchange Commission at Cadwalader, to the agency.
“These transactions raise serious concerns. The question arises whether it is really a coincidence,” agreed Dan Taylor, a professor at the Wharton School specializing in insider trading.
Equitrans stated to the agency that neither the company nor its executives were involved in the call options transaction.
