Court fines former Wells broker $5.6 mln for Burger King trading

Tue Jan 14, 2014 4:01pm EST

Jan 14 (Reuters) - A former broker in Miami has been ordered to pay $5.6 million for trading Burger King Holding securities in 2010 on insider information he received from a client.

The Securities and Exchange Commission said Tuesday that a U.S. federal court approved its motion for a default judgment against Waldyr Da Silva Prado Neto, a Brazilian citizen who worked for Wells Fargo Advisors at the time of the incident.

Prado, as he is known, traded in Burger King stock and options after learning from a long-time Brazilian client that private equity firm 3G Capital Partners was going to buy the fast-food chain. The client, an investor in a 3G Capital buyout fund, often shared confidential financial information with Prado on the understanding that the information was to remain confidential, the SEC charged.

Prado, who had worked with the client for more than 10 years, used the information to buy securities that yielded $175,000 in profits and also tipped at least four of his clients to the pending deal. The SEC earlier settled with one of those clients.

Prado's trades occurred between May 17, 2010 and Sept. 3, 2010, the day Burger King announced the $4 billion buyout. Under the final judgment, Prado was ordered to disgorge $397,110 in ill-gotten gains, interest of $41,622 and $5.19 million in penalties.

Prado left Wells Fargo Advisors, a unit of Wells Fargo & Co in May 2012 to become a broker at Morgan Stanley, but was terminated four months later for job abandonment, according to the SEC.

Shortly before the agency froze his assets in September 2012, Prado put his Miami home up for sale and began transferring all of his assets out of the U.S. He did not participate in any of the court actions and is living in Brazil, said a person familiar with the case.

A lawyer who has represented Prado in the U.S. did not return calls for comment.

Prado, who worked at Prudential Securities in New York before joining Wells Fargo in 2003, could not be reached for comment.

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