SEC Probing 3Com Option Trades

The SEC has no problem being all over what is handed to them on a silver platter. As to the pyramid scheme that the market now is, they'll just leave that one alone. " Bullish bets on 3Com Corp. options four hours before Hewlett-Packard Co.’s bid for the maker of computer-networking equipment are being investigated by regulators, according to a person familiar with the matter."

The chances this was an innocent calendar spread, or a trade masked as one, are promptly going to zero.

Bloomberg reports:

The Securities and Exchange Commission is examining whether someone used advance knowledge of Hewlett’s offer to illegally profit from the surge in 3Com’s stock when the deal was announced, according to the person, who declined to be identified because the inquiry isn’t public.

“It screams insider trading to the SEC,” said Peter Henning, a law professor at Wayne State University in Detroit and former SEC attorney.

Way to earn that $1 billion budget SEC. $50,000 booty split TBD.