SEC files lawsuit over Heinz option trading

REUTERS - U.S. securities regulators on Friday filed suit against unknown traders in the options of ketchup maker H.J. Heinz Co (HNZ.N), alleging they traded on inside information before the company announced a deal to be acquired for $23 billion by Warren Buffett's Berkshire Hathaway (BRKa.N) and Brazil's 3G Capital.

The suit, filed in federal court in Manhattan, cites "highly suspicious trading" in Heinz call options just prior to the February 14 announcement of the deal.

It claims the traders are either in, or trading through accounts in, Zurich, Switzerland.

On Wednesday, there was a sudden burst of bullish call options buying, expecting that H.J. Heinz shares would rally in coming months. After the deal was revealed Thursday, options market experts called Wednesday's trading "suspicious and incredibly well-timed."

The SEC has obtained an emergency order to freeze assets in a Swiss account linked to the trading.

"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 nonpublic information," Daniel M. Hawke, Chief of the SEC's Division of Enforcement's Market Abuse Unit said in a statement.

Representatives of Heinz, Berkshire Hathaway and 3G were all unavailable for immediate comment.

The suit is Securities and Exchange Commission vs. Certain Unknown Traders in the Securities of H.J. Heinz Co, U.S. District Court, Southern District of New York, No. 13-1080. (Reporting by Jonathan Stempel and Bernard Vaughan; Writing by Ben Berkowitz; Editing by Leslie Adler and David Gregorio)

Updated Date: Feb 16, 2013 03:45 AM

Also Watch

Watch: Firstpost test rides the new Thunderbird 500X in Goa and walks you through the Royal Enfield Garage Cafe
  • Tuesday, April 17, 2018 Varun Dhawan on Shoojit Sircar's October, 5-star reviews and working with Anushka Sharma in Sui Dhaaga
  • Saturday, April 14, 2018 Ambedkar Jayanti: Re-visiting Babasaheb's ideals exposes fake Dalit politics of Rahul Gandhi and Congress
  • Monday, April 9, 2018 48 hours with Huawei P20 Pro: Triple camera offering is set to redefine smartphone imaging
  • Monday, April 16, 2018 Rajyavardhan Singh Rathore interview: Sports can't be anyone's fiefdom, we need an ecosystem to nurture raw talent

Also See