Swiss financial regulators join Heinz trading probe
Financial regulators in Switzerland confirmed on Friday that they joined an expanding investigation of alleged insider trading ahead of a $28 billion deal for H.J. Heinz Co.
Authorities have been unable to identify the person or persons who made suspicious trades from a Goldman Sachs account in Zurich the day before Heinz announced its acquisition deal.
In federal court in Manhattan on Friday no one challenged a temporary freeze on the account that the Securities and Exchange Commission obtained last week. U.S. District Court Judge Jed Rakoff granted the SEC's request for a permanent freeze.
The Swiss Financial Market Supervisory Authority, known as Finma, is helping the SEC investigate who placed a big bet on the Pittsburgh food company's stock.
“Finma always cooperates within its legal mandate with the Securities Exchange Commission on insider investigations,” spokeswoman Christina Bürgi told the Tribune-Review in an email. “We confirm that we received a request for administrative assistance from the SEC in the alleged insider trading case involving the Heinz transaction.”
Bürgi declined to say when Finma received the request or to comment further.
The SEC obtained a court order to freeze assets of the Zurich account on Feb. 15, the day after Heinz said Warren Buffett's Berkshire Hathaway and Brazilian investment firm 3G Capital would acquire it. On Tuesday, the FBI said it was looking at the case. The agencies would not comment.
Though the Swiss equivalent of the SEC is assisting with the investigation, the Federal Office of Police in Switzerland told the Trib that U.S. authorities have not contacted it.
The SEC has said New York investment firm Goldman Sachs informed the agency that the Zurich account belongs to a “private wealth client,” but Goldman, which has said it is cooperating with the investigation, doesn't have direct knowledge of who was involved.
SEC investigators have asked Goldman to “use whatever means they have to contact” the traders.
“They can hide but their assets can't run,” Rakoff said after signing the freeze order.
The trader or traders invested about $90,000 in option positions the day before the deal became public, the SEC said. A day later the position increased to more than $1.8 million, or almost 2,000 percent.
The SEC said traders had advance material non-public information about the pending deal. The purchase of the options, which expire on June 22, was highly unusual, the SEC said.
Bloomberg News contributed to this report. Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or firstname.lastname@example.org.