* Igor Cornelsen to pay $5.18 million in settlement
* SEC says Cornelsen tipped by broker ahead of 2010 buyout
* Defendant's lawyer says Cornelsen pleased to resolve case
By Jonathan Stempel
Nov 30 A former Brazilian banker will pay $5.18
million to settle U.S. Securities and Exchange Commission
charges of insider trading in Burger King Holdings Inc before
the second-largest U.S. fast-food chain agreed to a 2010 buyout.
According to the regulator, the former banker, Igor
Cornelsen, 64, prodded his broker, Waldyr Da Silva Prado Neto,
for tips after Prado, who then worked at Wells Fargo & Co
, learned from a customer that Burger King was up for
Burger King agreed on Sept. 2, 2010, to be bought by private
equity firm 3G Capital Partners Ltd for $3.26 billion, or $24
That was about 46 percent above the share price when rumors
that the maker of Whopper hamburgers might be acquired had
surfaced two days earlier.
The SEC said Cornelsen began trading Burger King call
options, a bet the stock would rise, on May 18, 2010, one day
after Prado told him in an email written in Portuguese: "I have
some info ... You have to hear this."
Cornelsen would subsequently seek tips by sending cryptic
emails, saying such things in Portuguese as "Is the sandwich
deal going to happen?" the SEC said.
Finally, the regulator said that, upon realizing how much he
had made after the takeover was announced, Cornelsen exclaimed
in an email to Prado, in English this time, "Wow! What a day!"
Friday's settlement requires court approval. It calls for
Cornelsen, a resident of the Bahamas, and his firm, Bainbridge
Group Inc, to pay a $3.36 million fine, give up $1.68 million of
illegal profit and pay $136,621 of interest.
James Benjamin, a partner at Akin Gump Strauss Hauer & Feld
who represents Cornelsen, said: "Mr. Cornelsen is an honorable
man with a distinguished career. He is pleased to resolve this
The SEC filed related insider trading charges against Prado,
42, on Sept. 20 and won a court order freezing his assets. It
said litigation is continuing.
Now called Burger King Worldwide Holdings Inc, the
Miami-based company again became publicly traded on June 20
through a "reverse merger" involving a shell company co-founded
by hedge fund manager William Ackman
The case is SEC v. Cornelsen et al, U.S. District Court,
Southern District of New York, No. 12-08712.