WASHINGTON — The Supreme Court on Monday rejected an appeal by a California investor who said he lost $500,000 because of an insider trading scheme.
The court, without comment, let stand a ruling that excluded John Olaques of Mill Valley from receiving any money from a $7.8-million settlement of the insider case.
The dispute stems from a proposed merger between Santa Fe International Corp. and Kuwait Petroleum Co. in 1981.
The Securities and Exchange Commission charged that some traders in Santa Fe stock and options benefited illegally from insider information about the deal between Sept. 21 and Oct. 1, 1981.
The defendants in the case agreed to surrender $7.8 million in profits to some 1,900 investors. A federal judge approved the settlement in 1986.
Traded Before Scheme
Olaques challenged the settlement, arguing that he was excluded improperly from recovering $500,000 in losses.
The 2nd U.S. Circuit Court of Appeals ruled against him last May. The appeals court upheld a judge's decision that Olaques did not qualify for any money from the settlement because his investment took place before the insider trading scheme occurred.
The appeals court said Olaques was not entitled to intervene in the settlement after it has been approved. He "should not expect to be able to stand aside and watch others incur the expenses of lengthy litigation and then upset the results of those efforts," the appeals court said.
Olaques said he was hurt by the insider trading scheme even though he purchased options on Santa Fe stock before Sept. 21, 1981. He said the options did not expire until Oct. 6, 1981.
The case is (Olaques vs. SEC, 87-769.)