The U.S. Securities and Exchange Commission filed an insider trading case against three individuals alleging illegal tipping and trading in advance of Eurex Frankfurt AG’s US$2.8 billion cash merger agreement with International Securities Exchange Holdings, Inc.

The defendants are the vice chairman of the ISE and two partners in a New York-based financial consulting partnership. The SEC’s complaint alleges that the ISE executive received information regarding the confidential ISE-Eurex merger talks, and tipped the other two, who allegedly made illegal profits totaling approximately US$1.1 million and US$31,000, respectively.

Simultaneous with the filing of the SEC action, the U.S. Attorney’s Office for the Southern District of New York announced the filing of a criminal complaint charging the three men with conspiracy to commit securities fraud.

None of the allegations have been proven.

“The SEC will act aggressively when — as alleged in this case — those who direct registered securities exchanges misuse proprietary information for personal gain,” said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement.

Following the filing of charges, the ISE announced that it has accepted the resignation of its former vice chairman. The ISE noted that it has not been named in either complaint.