On behalf of Douglas F. Behm, Attorney at Law posted in Business & Commercial Law on Tuesday, February 19, 2013
One of the most notable slogans for Heinz ketchup may be, “Good things come to those who wait.” And many of our Arizona readers may be able to recall how the song “Anticipation” was once used in ads to highlight the value of that tasty wait.
Federal regulators say they suspect there are some in the business world who lacked critical patience in connection with the recent announced acquisition of the H.J. Heinz Company. Officials of the Securities and Exchange Commission say they’ve launched a probe into possible insider trading in connection with the purchase by Berkshire Hathaway and Brazil’s 3G.
Authorities say they believe a brokerage in Switzerland was used to place trade orders on Wednesday of last week — the day before the acquisition deal was announced. Shares rose 20 percent when the announcement was made and officials say whoever was behind the particular trades in question made more than a $1.5 million. Authorities say the trades focused on call options — a vehicle that lets traders pledge to buy stock in a company at a set price on the speculation that the stock’s value will increase beyond that set price for some reason.
A statement from the SEC says it became suspicious because the account that was used hadn’t touched Heinz securities for nearly half a year before Wednesday’s activity. A spokesman says someone must have known something to trigger the trading.
The SEC says there is no allegation of wrongdoing by Berkshire or 3G and that the probe won’t derail the acquisition. The suspect account has been frozen by court order. Representatives of the Zurich bank that hosts the account say they are cooperating with investigators.
Securities fraud charges can carry severe penalties if convictions are obtained. Anyone facing such charges should not face them without the benefit of experienced legal counsel.
Source: TwinCities.com, “SEC alleges insider trading ahead of Heinz deal,” Christopher S. Rugaber and Candice Choi, AP, Feb. 15, 2013