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Fake account seen possible in Reebok case

SEC investigates use of retiree's name for trades

WASHINGTON -- Deepening the mystery of how a retired Croatian woman got mixed up in insider trading of Reebok International Ltd. share options, sources close to the case said yesterday that US authorities are looking into whether someone set up an account in her name to hide trades.

Sonja Anticevic -- a 63-year-old retiree living in the small city of Omis on the Croatian coast -- told Reuters recently she knows nothing about stocks or markets. She has since pleaded with other press outlets to leave her alone.

But the Securities and Exchange Commission has frozen an online brokerage account in Anticevic's name and accused her of being involved in insider trading ahead of the Aug. 3 news that Reebok would be acquired by Adidas-Salomon AG in a blockbuster sports gear industry deal worth $3.8 billion.

The SEC is now investigating whether someone -- possibly a family relation -- used Anticevic's name as a cover for the insider trades that allegedly netted $2 million in profits, said sources close to the matter.

The SEC said on Aug. 5 it had won a court order to freeze an account in Anticevic's name at online brokerage CyberTrader Inc., a unit of financial group Charles Schwab Corp.

The SEC alleged that on Aug. 1 and Aug. 2 the account was used to buy 1,997 out-of-the-money call options on Reebok shares for a total cost of about $130,000.

''It seems very likely that someone could have funded her account and made these questionable trades," said Jon Najarian, a Chicago options trader and founder of insideoptions.com, a financial website specializing in options and equities.

Call options are contracts to buy securities, such as shares of stock, at a specified strike price on a fixed future date. A call option is out-of-the-money if the strike price is greater than the market price of the underlying security.

Buying out-of-the-money calls gives an investor a chance to profit handsomely if the underlying share's price rises.

After US-based Reebok announced it had agreed to be acquired by Adidas, Reebok shares rose more than 30 percent.

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