Pennsylvania man charged with insider trading related to CVS takeover

By Jonathan Stempel

(Reuters) – Federal prosecutors charged a Pennsylvania man on Thursday with insider trading for using tips from his domestic partner to trade illegally ahead of CVS Health (NYSE:)’s $9.5 billion purchase last year of primary care provider Oak Street Health.

Carlos Sacanell, 58, of Willow Grove, was also charged with lying to the FBI by denying having received the tips before the takeover was announced in February 2023. The U.S. Securities and Exchange Commission filed a related civil case against Sacanell.

A lawyer for Sacanell did not immediately respond to requests for comment. The office of U.S. Attorney Jacqueline Romero in Philadelphia said Sacanell was arrested on Thursday at his home.

Authorities said Sacanell generated $617,000 trading in Oak Street stock and options after his partner, a senior Oak Street executive, shared material non-public information about the planned takeover.

The SEC said the trading began two days after Sacanell’s partner, who had learned a takeover might be in the offing, lamented in a text message that it was “very uncomfortable having information I can’t share.”

Sacanell texted back that his partner should tell inquiring co-workers you don’t know what’s going on, the SEC said.

The partner was not charged.

CVS, the drugstore chain and pharmacy benefits manager, agreed to buy Oak Street for $39 per share, 50% above where the stock traded shortly before news of the takeover became public, the SEC said.

Oak Street’s share price rose 36% over the next two days, including after CVS announced the takeover. CVS valued the transaction at $10.6 billion including debt.