KUWAIT CITY, (AFP) — A Kuwaiti investment broker facing a US lawsuit for allegedly profiting from fake takeover bids was found dead on Sunday, a security source said.

“Hazem Khalid al-Braikan was found dead in his home in Al-Rawdha,” south of the Kuwaiti capital, the source told AFP on condition of anonymity.

He did not reveal the cause of death but private Kuwaiti television channel Al-Rai reported that the prominent investment broker and chairman of Al-Raya Investment Company had committed suicide.

The US Securities and Exchange Commission on Thursday filed a lawsuit in New York against Braikan and three Gulf financial institutions for alleged trading “around hoax bids for US companies.”

The SCE also obtained a restraining order freezing over five million dollars held by Braikan, Al-Raya Investment Company, KIPCO Asset Management Company and the United Gulf Bank.

The SCE said Braikan and the three companies had engaged in “an illicit scheme through which they reaped millions of dollars in profits from trading around hoax offers to acquire US companies.”

The SCE charged that Braikan and the companies allegedly “traded around false news of a purported tender offer by a Middle East investment group to acquire Harman International Industries at 49.40 dollars per share.”

“A phony press release publicising the hoax offer was faxed to media outlets on Sunday, July 19, and subsequently reported on the Internet on Monday, July 20, before the stock market opened,” the SCE said.

Initially Harman International’s share price “which had closed the previous trading day at 25.18 dollars, climbed more than 40 percent in pre-market trading,” the SCE said in the lawsuit.

“Harman International repudiated the offer shortly before the market opened for regular trading. The share price dropped sharply thereafter and closed the day at 20.86 dollars,” it added.

It also claimed that Braikan and two of the companies engaged in another fake takeover of Textron Inc. in April 2009, amassing securities which they later sold at inflated prices “to reap illicit profits.”

The SCE said it was seeking “a permanent injunction, disgorgement of ill-gotten gains with prejudgment interest, and financial penalties.”

Al-Raya Investment Company denied any wrongdoing in a statement published Sunday by Kuwaiti newspapers.