The US Securities and Exchange Commission (SEC) has charged an analyst with credit ratings agency Standard & Poor’s (S&P) and two of his friends with insider trading related to last year’s merger between paint firms Sherwin-Williams and Valspar.

Sherwin-Williams bought Valspar in a deal valued at $11.3 billion in June 2017.

In the lawsuit, filed in Manhattan, SEC alleges that Sebastian Pinto-Thomaz, an S&P analyst based in New York, learned of the proposed acquisition when Sherwin Williams consulted the agency about the deal’s potential affect on its credit rating.

The SEC said that Pinto-Thomaz tipped off his friends – Abell Oujaddou, a co-owner of an upmarket New York hair salon and Jeremy Millul, a New York jeweler – who bought Valspar shares and options before the merger was announced, then sold them afterward, making a profit of around $192,000 and $107,000 respectively.

In a parallel action, the US Attorney’s Office for the Southern District of New York has announced criminal charges against the three.

S&P told Reuters news agency that Pinto-Thomaz has been suspended and that it is cooperating with authorities.