Dow Drizzles on LBO Parade

The tip led to an internal investigation that culminated in the dismissal of the veteran pair, the source says. It is not clear who contacted the company nor how the company's verified the information it received. It is also unclear which private equity shops were involved.

"The situation right now is that we've taken the action we've taken. What more action we take, if any, we haven't yet determined," says Dow spokesman Chris Huntley, who declined to comment further or provide any specifics behind the reason for the executives' dismissals.

"As a practical matter, the fact that this occurred and the manner in which it occurred and given the effect on the market, both the rise and drop in share price are appropriate reasons for an inquiry," says Jacob Frenkel, securities lawyer at Shulman Rogers Gandal Pordy & Ecker in Rockville, Md.

Bob Burson, senior associate and regional director at the Securities and Exchange Commission's division of enforcement in Chicago, declined to comment on any inquiries.

Reinhard says that he is seeking legal advice as well and adds that Dow "has not produced any definitive information" supporting its claims.