Only this time it was the US Securities and Exchange Commission that has come off second-best after failing to prove a civil insider trading charge against a savvy Spain-based investor, who took the unusual step of travelling to the US to fight the charges.

Judge Marvin E Aspen concluded the SEC could not establish 37-year-old Luis Martin Caro Sanchez, who resides in Madrid, received confidential information about a takeover offer for Potash Corp in 2010, a few days before the company was approached by BHP, which sent its shares up nearly $C30.

The SEC argued Sanchez purchased out-of-the-money call options in August of that year which provided him with a 1000% return on his investment after the announcement.

He purchased just shy of 50,000 euros worth of Potash call options which generated a profit of around €576,000 after the announcement was made.

The SEC was quick to respond, filing a lawsuit only three days after Potash’s announcement of the BHP offer and freezing the accounts of Sanchez and another Spanish investor, Juan Jose Fernandez Garcia.

At the time, Garcia was also head of the European equity derivatives division of Spanish bank Banco Santander, which advised BHP on its Potash offer.

The latter settled with the SEC in April last year, while Sanchez took his fight to the US.

He denied knowing Garcia or anyone else connected with the transaction, placing the emphasis back on the SEC which was unable to prove who might have been the source of the alleged leaked information.

Sanchez claimed he bought the call options based on his own research which led to an “intuition” about Potash as a sound investment opportunity.

In his deposition, Sanchez explained his choice to buy call options, rather than the underlying security, as an attempt to increase the risk level of his overall portfolio.

In handing down his ruling, Judge Aspen found the SEC theorised Sanchez was informed of some unidentified information related to the proposed acquisition, at an unidentified time, by an unidentified insider and traded on this unidentified information.

“While insider trading can be established through circumstantial evidence, there needs to be more than just suspicious transactions, even when it results in a profit of 10 times the initial investment in less than a week,” Aspen said according to court transcripts.