The US Securities and Exchange Commission (SEC) has frozen the assets of a Swiss bank account suspected of involvement in insider trading directly preceding Heinz’s acquisition by Berkshire Hathaway last week. According to SEC, unknown traders bet that Heinz’s stock would go up by purchasing call options the day before the acquisition’s announcement. When Heinz’s stock jumped 20 percent following the deal, those options translated to a gain of about $1.7 million. “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,” says Daniel M. Hawke of the SEC’s Market Abuse Unit. SEC’s complaint charges the traders with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.
SEC investigating suspected insider trading in Heinz acquisition
A Swiss bank account that was linked to call options on Heinz has been frozen.
Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!