Former BP Employee Charged for Insider Trading

The Securities and Exchange Commission (SEC) has charged a former employee of oil giant BP for insider trading during the Gulf of Mexico oil spill disaster involving the Deepwater Horizon oil rig. Keith A. Seilhan was charged with misusing confidential information entrusted to him during the course of the clean-up operations, to make profits in the securities market.

BP share prices fell drastically on the back of news that BP’s Deepwater Horizon oil rig in the Gulf of Mexico had suffered an explosion and vast quantities of oil were leaking into the ocean. BP consequently launched a large scale clean-up effort.

BP had tasked Keith A. Seilhan with coordinating its oil collection/clean-up efforts in the area of the spill and on the coast. Within days of giving him the responsibility, BP also gave nonpublic information to Seilhan on the full extent of the disaster, including estimated rates of oil flow and data on how much oil was floating into the ocean.

BP had initially estimated that the oil well was losing only 5000 barrels of oil per day, but later revised the estimate to between 52700-62200 barrels of oil per day. Seilhan deduced that with the new information, the company’s financial exposure and potential liability would go up causing it to take a serious beating on the stock market.

European Corporate Counsel is the author of this article on Eu directive.

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European Corporate Counsel is the author of this article on Eu directive. Find more information, about Eu regulation here