Warren Buffett insider trading? An article posted today at CNN says the SEC obtained a court order to freeze assets in a Swiss trading account, after alleging insider trading on a deal between a group, including Warren Buffett's Berkshire Hathaway, and H.J. Heinz Co.
The SEC says the day before an announcement occurred of a $28 billion acquisition between H.J. Heinz Co., and a group, including Warren Buffett's Berkshire Hathaway, "unknown" traders using the Swiss account had purchased options which led to a gain of $1.7 million when the deal went public.
The complaint, filed in a Manhattan federal court, says the responsible parties "are either foreign traders or traders trading through foreign accounts" in Zurich, Switzerland. It looks like whoever did the deal is out of luck for now since the court order prevents any funds from being withdrawn from the trading account.
In a statement, SEC's Daniel Hawke said: "Irregular and highly suspicious options trading immediately in front of a merger or acquisition announcement is a serious red flag that traders may be improperly acting on confidential nonpublic information."
The persons using the account will have to appear in court with an explanation if they want the to be able to withdraw the funds. The trade seems suspicious to the SEC since the Swiss account had not been used to trade any Heinz-related securities in the past six months
What are your thoughts on insider trading? Do you feel insider trading is the case in this incident?
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