SEC Freeze Assets: Possible Insider Trading on The $28bn
Buffett Takeover of Heinz
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. Heinz: SEC investigates possible insider trading The US Securities and Exchange Commission is investigating suspected insider trading on the $28bn (£18bn) takeover of food giant Heinz. 
The
regulator has obtained an emergency court order to freeze assets in a Swiss
account, which was used to generate more than $1.7m from trades in advance of
Thursday’s announcement that Warren Buffett and 3G Capital had made a
surprise swoop on Heinz.
Unnamed
traders took “risky bets” that Heinz’s share price would rise before there
was any “public awareness” that Buffett’s Berkshire Hathaway investment group
and 3G Capital had agreed a deal for the food manufacturer, the SEC said in a
statement.
The
traders bought call options the day before the announcement, putting them in
a “position to profit substantially” when the deal was announced, the SEC
said.
Following
the surprise revelation on Thursday shares in Heinz rose by almost 20pc and
trading volume rose more than 1,700pc compared with the previous day.
“Irregular
and highly suspicious options trading immediately in front of a merger or
acquisition announcement is a serious red flag that traders may be improperly
acting on confidential non-public information,” said Daniel Hawke, head of
the SEC’s market abuse unit.
The SEC
said the timing and the size of the trades were “highly suspicious” because
the Zurich-based account through which the call options were bought had “no
history of history of trading Heinz securities in the last six months”.
The
$28bn deal by 82-year-old Mr Buffett is the biggest ever takeover in the food
industry.
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1 comment:
Is this the same SEC that FAILED to regulate the BANKSTERS and their SECURITIZED MORTGAGE BACKED ASSETS ? How come they have done NOTHING ABOUT THAT "LITTLE" PROBLEM? Not only the BANKS DID NOT DELIVERED THE NOTES, THEY DISECT IT, and offered as an investment many times, the same note, knowing the asset securing it was going to implode.
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