Today, the SEC announced obtained an emergency court order to freeze assets in a Swiss bank account which allegedly traded ahead of a public announcement concerning Berkshire Hathaway and 3G Capital’s $28 billion acquisition of H.J. Heinz Company.
The SEC claims that “irregular and highly suspicious options trading” just before a public announcement concerning a merger or acquisition is a red flag for insider trading. Compared to options trading activity several days before the public announcement, the SEC claims that the activity at issue was irregular and that the Defendants had no prior history of trading in Heinz. Their initial investment of $90,000 soared to over $1.8 million after the public announcement.
This case demonstrates SEC’s aggressive stance on insider trading, and it is very likely that 2013 will continue this way.