Two French citizens have been charged by U.S. regulators with using inside information to buy securities of Chattem Inc before Sanofi-Aventis said it would acquire the healthcare group.

The Securities and Exchange Commission suit filed Tuesday alleges that Gilles Roger and Nicolas Condroyer bought hundreds of option contracts for stock in Chattem while knowing information about the Sanofi-Aventis deal.

The SEC said Roger and Condroyer are French citizens who reside in Belgium. Calls to Condroyer were not immediately returned. Attempts to reach Roger were unsuccessful.

Between December 7 and December 17, Condroyer bought more than 1,900 Chattem call option contracts and on December 17 Roger bought about 940 call options, the SEC alleged in its complaint filed in federal court in Atlanta. The two men bought the contracts in a newly opened U.S. account while in possession of material, nonpublic information about the merger, the SEC said.

When the $1.9 billion acquisition was announced December 21, Roger and Condroyer sold all their options and made about $4.2 million in illegal profits, the SEC alleged.

The SEC said it had obtained an emergency court order to freeze the men's assets and prohibit them from destroying the evidence.

The case is Securities and Exchange Commission v. Condroyer and Roger, U.S. District Court for the Northern District of Georgia, case no. 09-3600.

(Reporting by Rachelle Younglai; Editing by Tim Dobbyn and Richard Chang)

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