Posted by: youngragingbull | February 16, 2013

SEC looking into trades prior to Heinz deal: NYT

U.S. regulators have opened an insider trading inquiry on the $23 billion acquisition of H.J. Heinz, according to a published report.

Citing an unnamed source who was briefed on the matter, The New York Times reported Friday that the Securities and Exchange Commission is looking at “unusual trading” surrounding the deal for Heinz to be purchased by Warren Buffett’s Berkshire Hathaway and 3G Capital, an investment firm that also recently bought Burger King.

The report said regulators first noticed a suspicious spike in trading on Wednesday.

The New York Times report noted that options trading in Heinz soared this week before the deal was announced Thursday morning.

Call options let investors can place a bet on a stock without committing to buy the shares. Investors instead have the option to buy the shares later for a set price.

The report noted that the SEC often opens inquiries into trading activity after major deals without bringing charges later on. Heinz and the buyers haven’t been accused of any wrongdoing.

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