SEC alleges inside trading ahead of Heinz merger
WASHINGTON - Federal regulators have alleged that a Swiss brokerage account was used for insider trading ahead of the H.J. Heinz merger Thursday.
The Securities and Exchange Commission obtained a court order Friday to freeze the account and prevent the assets from being moved.
The account was used for trades placed Wednesday that netted $1.7 million after the merger was announced. The SEC says it doesn't know the identity of the traders but said they "took risky bets" that Heinz's stock price would increase.
On Thursday, it was announced that Warren Buffett's Berkshire Hathaway and a Brazilian firm had agreed to buy Heinz. Heinz's stock rose nearly 20 percent after the merger.
The SEC is alleging that the traders must have known in advance about the pending transaction based on inside information.
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