Sunday, March 10, 2013

Heinz Insider Trading Came From Goldman Sachs Account


Another black eye for Blankfein.
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Suspicious Heinz Trading Came From Goldman Sachs Account
Bloomberg
The SEC on Feb. 15 sued “unknown” traders over suspicious trading of Heinz’s options through an account at Goldman Sachs.  The New York-based bank told SEC senior counsel Megan Bergstrom that the account holder is a Zurich private wealth client.
The unidentified traders are “foreign traders and trade through a foreign account."
U.S. District Judge Jed Rakoff, who is presiding over the case, temporarily froze the assets in the account on Feb. 15 at the SEC’s request.
The SEC yesterday asked Rakoff to keep the assets frozen until the case is resolved, saying there is a “serious risk that the substantial proceeds from the defendants trading will leave the jurisdiction of the U.S. courts in the next few days and may never be recovered,” according to a court filing.
The defendants, using the Goldman Sachs account, invested almost $90,000 in option positions the day before the deal was announced, the SEC said. As a result, their position increased to more than $1.8 million, a rise of almost 2,000 percent.
The SEC said that the traders had advance material nonpublic information about the impending deal when they used an omnibus account in Zurich to buy 2,533 out-of-the-money June call options, which had a strike price of $65 on Feb. 13. Shares closed that day at $60.48.
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UPDATE - Warren Buffett Betrayed By Insider Trading At Heinz


Last week's Barron's Cover by William Banzai7...

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