Santander pair accused of insider trading on BHP Billiton's Potash bid

A senior Banco Santander executive and his accomplice have been charged with making $1.1 million (£713,000) profit by insider trading on BHP Billiton's $39 billion bid for Potash Corp.

Juan Garcia, the 35-year-old head of equity derivatives research at Santander, and another Madrid resident, Luis Sanchez, spent just $61,000 to make the fortune, according to charges laid by the US Securities and Exchange Commission.

Days before the bid went public last week the two bought call options on Potash shares which were about to expire and were massively below the then share price.

Potash shares shot up 28% from $112 when BHP launched its $130-a-share offer and the two sold out. They then tried to move their profits from New York to Madrid but the SEC froze their assets.

"Garcia and Sanchez tried to move offshore highly suspicious trading profits made just days before," said SEC enforcer Daniel Hawke.

BHP reported a 47% rise in second-half profit today, in line with analysts' forecasts, after a sharp rebound in iron ore and copper prices.