Much has been written about the rejuvenation of SEC enforcement. No doubt much more will be written in the future. Perhaps the insider trading case filed Wednesday is a harbinger of good things to come for SEC Enforcement. SEC v. Saleh, Case No. 3:09-cv-01778 (N.D. Tex. Filed Sept. 23, 2009).

On Monday, September 21, 2009, Dell, Inc. announced the acquisition of Perot Systems at $30 per share for a total of approximately $3.9 billion. Following the announcement, the share price of Perot Systems shot up about 65% to close at just under $30 per share from the prior day close of just under $18 per share.

Two days later, the SEC filed its insider trading case against Reza Saleh. The complaint alleges that Mr. Saleh traded options in advance of the merger based on inside information, reaping huge profits.

Mr. Saleh is not an employee of either company. The assertion that Mr. Saleh traded based on inside information is predicated on conversations he had with other employees, violations of company policy and large option trades. Drawn from what was clearly a very quick investigation, the complaint alleges that:

• Mr. Saleh is employed by Parkcentral Capital Management, L.P. through which he did work for non-public affiliate Perot Investments, Inc. and Perot Systems. He also has two e-mail accounts, one of which is a Perot Systems account.

• On or before September 8, 2009 – the deal negotiations began on September 4, 2009 — Mr. Salem asked questions of a Perot Systems director who also is a director of Parkcentral that “demonstrated Saleh’s awareness of material, nonpublic information about a pending transaction pursuant to which Perot Investments would be acquired at a ‘premium.’” The conversations confirmed the deal was moving forward.

• After the SEC contacted Mr. Saleh, he made statements to the same director and another employee acknowledging that the bought stock based on his knowledge about the deal.

• Between September 4, 2009 and September 18, 2009, the last trading day before the deal announcement, Mr. Saleh purchased through two accounts 9,332 call options expiring in October 2009 and January 2010. Following the September 21 announcement the options were sold, generating over $8.6 million in profits.

• Mr. Saleh’s trading violated the policies of the company which required pre-notification for any trading in the shares of a public company and which also specified that any open positions be maintained for at least 30 days unless closed to a loss.

Based on these facts, the Commission filed an insider trading complaint against Mr. Saleh. Previously TD Ameritrade, Inc., where the two accounts were located, froze the trading profits. The case is in litigation.

This case is an example of the aggressive posture of SEC enforcement in insider trading cases. While a careful reading of the allegations in the complaint suggest the Commission’s evidence is not definitive, overall it represents a very quick and effective investigative effort by the Commission, coordinating with the Options Regulatory Surveillance Authority. Gathering the relevant trading records, quickly interviewing key players in the transaction and filing a complaint within two days is clearly a good enforcement effort.