FBI joins SEC insider trading probe in $28-bn HJ Heinz deal
20 February 2013
The US Federal Bureau of Investigation (FBI) has joined a criminal probe by the US securities regulator Securities and Exchange Commission (SEC) into suspected insider trading by unknown traders a day before Warren Buffett and 3G Capital tabled a $23-billion bid to acquire ketchup giant H J Heinz & Co.
The FBI moved a few days after the SEC obtained an emergency court order to freeze a Goldman Sachs Swiss trading account and filed a suit against unknown traders over insider trading charges in the proposed acquisition of Heinz. (See: SEC files suit, freezes Goldman Sachs account in suspected insider trading in Heinz deal)
''We are consulting with the SEC to determine if a crime was committed,'' said Kelly Langmesser, a spokeswoman in the FBI's New York office.
The SEC has alleged that prior to any public awareness of Warren Buffett's investment arm, Berkshire Hathaway, and 3G Capital acquiring Heinz, unknown traders purchased call options the day before the public announcement and profited by $1.7 million.
According to the SEC, the unknown traders were in possession of material non-public information about the impending acquisition and invested almost $90,000 in option positions the day before the deal was announced.
It said that the timing and size of the trades were highly suspicious because the account through which the traders purchased the options had no history of trading Heinz securities in the last six months.