SEC investigating trades surrounding Heinz deal
The Associated Press
Posted: Feb 15, 2013 1:33 PM ET
Last Updated: Feb 15, 2013 5:38 PM ET
Traders work at the post that trades H.J. Heinz Co. on the floor of the New York Stock Exchange on Thursday. (Brendan McDermid/Reuters )
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U.S. regulators have opened an insider trading inquiry on the $23 billion US 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.
A spokeswoman for the SEC, Christina D'Amico, said the agency does not confirm or deny the existence of investigations. Representatives for Berkshire Hathaway and the public relations agency representing 3G and Berkshire in the deal did not immediately return messages for comment.
A spokesman for Heinz said the company hadn't been contacted by the SEC and therefore did not have any comment.
In announcing the deal, Heinz said the company planned to remain in Pittsburgh and that the move would help it continue its transformation into a global business more quickly.
In addition to ketchup, the company makes Classico pasta sauces and Ore-Ida potatoes, as well as a growing stable of sauces suited to regional tastes around the world.
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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