US authorities will step up their investigation into insider trading at Banco Santander today as the scandal threatens to engulf BHP Billiton’s $39bn (£25bn) bid for PotashCorp.

The Securities and Exchange Commission (SEC) has secured powers to seize documents, emails and phone logs from Santander’s Madrid office after charging senior executive Juan José Fernández García with market abuse.

Fernández García is accused of making nearly $1.1m in illegal profits by piling into call options in PotashCorp before BHP made its hostile offer and selling them shortly afterward when the stock had soared.

Santander, which is advising BHP on its attempted takeover, yesterday suspended Fernández García and insisted it had followed the “appropriate procedures”. “We are awaiting the results of both our internal and the supervisors’ investigations,” a spokesperson said.

The SEC will question Santander’s Mergers &Acquisition bankers to see whether they leaked news of the impending bid to Fernández García, who works in a separate part of the bank as head of European equity derivatives research.

Daniel Hawke, head of the SEC’s market abuse division, told City A.M.: “We will be examining all avenues of inquiry relating to the circumstances surrounding the trading. It appears highly suspicious and the likelihood that it was based on an investment decision without access to private information is low.”

Fernández García, 35, has hired top lawyer Scott Lassar of Sidley Austin in Chicago to help argue his case. Lassar is a former US attorney and has worked for clients such as Charles Conaway, the former Kmart chief executive, who was fined more than $10m for misleading investors in the retail chain in February.

It is not known whether Fernández García’s co-accused, Luis Martín Caro Sánchez, has engaged a lawyer. Caro Sánchez also lives in Madrid but is not thought to work for Santander.

The two men have been summoned to appear before judge Marvin Aspen at the US District Court for the Northern District of Illinois today. Aspen will set another date in two weeks’ time, by when the SEC must report with details of its probe.

Santander, the Eurozone’s largest bank, is one of several institutions that helped BHP line up a $45bn debt facility for its PotashCorp approach. BHP chief executive Marius Kloppers launched a fresh attack at speculators yesterday saying that “fast money” was piling into Potash in an attempt to profit from the deal. He said as much as 40 per cent of Potash’s share register had changed hands in the last two weeks, and dismissed talk of a counter-bid.