FBI investigating potential insider trading in Heinz

NEW YORK Tue Feb 19, 2013 5:27pm EST

Traders work at the post that trades H.J. Heinz Co. on the floor of the New York Stock Exchange, February 14, 2013. REUTERS/Brendan McDermid

Traders work at the post that trades H.J. Heinz Co. on the floor of the New York Stock Exchange, February 14, 2013.

Credit: Reuters/Brendan McDermid

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NEW YORK (Reuters) - The FBI is looking into possible insider trading in the options of ketchup maker H.J. Heinz Co HNZ.N before its blockbuster deal last week to be acquired by Warren Buffett and Brazil's 3G Capital, a bureau spokesman said on Tuesday.

Buffett's Berkshire Hathaway (BRKa.N) and 3G said last Thursday they would buy Heinz for $23 billion in cash. Almost immediately, options market players noted there had been extremely unusual activity the day before the deal was announced.

On Friday, the U.S. Securities and Exchange Commission filed a suit against unknown traders who it said used a Goldman Sachs (GS.N) account in Switzerland to trade on purported inside knowledge of the transaction.

On Tuesday, the Federal Bureau of Investigation said it was joining in as well.

"The FBI is aware of the trading anomalies the day before Heinz' announcement," a spokesman said. "The FBI is consulting with the SEC to determine if a crime was committed."

A spokeswoman for the investor group declined to comment on the FBI's involvement. A spokesman for Goldman Sachs said the bank is cooperating with authorities' investigations.

Swiss authorities have already said they have not been asked to help with the U.S. investigation.

The SEC enforcement action marked the second time in six months regulators had taken aim at alleged insider trading in a deal involving 3G. The first instance, last September, involved a stockbroker trading on inside information related to 3G's 2010 purchase of Burger King (BKW.N).

(Reporting By Emily Flitter; Additional reporting by Ben Berkowitz in Boston and Dan Wilchins in New York; Editing by Gary Hill, Jim Marshall and Steve Orlofsky)

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Comments (3)
Harry079 wrote:
“filed a suit against unknown traders who it said used a Goldman Sachs account in Switzerland”

Well geeze what a surprise a Goldman Sachs account. It shouldn’t be too hard to figure out who these(GS?) traders are.

Then again maybe it might.

Feb 19, 2013 5:51pm EST  --  Report as abuse
puzzled wrote:
Instead of chasing these irrelevant and minute trades, why doesnt the justice department go after the real perpetrators of market fraud – the likes of Bill Ackman, Dan Loeb, Carl Ichan (to name a few) who collude and manipulate stocks like Herbalife, Genzyme (to scratch the surface) and drive volatility in ways that they profit to the tune of hundreds of millions of dollars. How does Herbalife tank, Dan Loeb gets in challenging ackman, gets ichan to jump in and firther drive the price up, to only have Loeb sell shares all the way up? How many hundreds of millions if not billions were made on the BS while the retail investor sat with their thumbs up their butts? The market is rigged by the whales at the top and we have a justice system that is scared to act or simply decides to look the other way. F…that

Feb 19, 2013 6:26pm EST  --  Report as abuse
americanguy wrote:
Good old Goldman Sachs, innocent as a newborn baby I am sure.
Cooperating to help the US catch the “bad guys” being the great American law abiding firm it is.
I just hurled.

Feb 19, 2013 9:16pm EST  --  Report as abuse
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