U.S. SEC sues over suspicious Heinz options trading

Posted Feb. 15, 2013, at 4:43 p.m.
William R. Johnson, chairman & CEO of Heinz Co., discusses an agreement for Heinz to be bought by Berkshire Hathaway and 3G Capital during a news conference in Pittsburgh, Penn., on Feb., 14, 2013. Warren Buffett's Berkshire Hathaway and private equity firm 3G Capital will buy ketchup and baby food maker H.J. Heinz Co for $23.2 billion in cash, a deal that combines 3G's ambitions in the food industry with Buffett's hunt for growth.
JASON COHN | REUTERS
William R. Johnson, chairman & CEO of Heinz Co., discusses an agreement for Heinz to be bought by Berkshire Hathaway and 3G Capital during a news conference in Pittsburgh, Penn., on Feb., 14, 2013. Warren Buffett's Berkshire Hathaway and private equity firm 3G Capital will buy ketchup and baby food maker H.J. Heinz Co for $23.2 billion in cash, a deal that combines 3G's ambitions in the food industry with Buffett's hunt for growth. Buy Photo

NEW YORK — U.S. securities regulators on Friday sued unknown traders over suspected insider trading in H.J. Heinz Co. call options ahead of the announced buyout of the company.

The lawsuit said the options generated more than $1.7 million in unrealized profit before the ketchup maker on Thursday agreed to a $23 billion buyout by Warren Buffett’s Berkshire Hathaway and private equity firm 3G Capital Partners.

The U.S. Securities and Exchange Commission also said it had won an emergency court order to freeze assets in a Zurich, Switzerland-based trading account used to reap the alleged trading profits.

The lawsuit was filed in U.S. District Court in Manhattan.

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