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SEC Charges Heinz Call Buyers With Insider Trading
Yesterday, after the news of the Heinz acquisition hit the market just in time to wipe away the bitter aftertaste of the biggest GDP drop in Europe since 2009, we brought you the undisputed fact that someone made nearly $2 million in call options, which soared 1700% overnight and was bought the day before. It appears even the SEC finally is back to doing what its historic task was before it discovered internet porn, and one day after the report, has charged unidentified traders operating or trading out of Zurich, Switzerland with generating some $1.8 million in profits. Notably, the trade occurred through an "omnibus account located in Zurich, Switzerland in the name of GS Bank IC Buy Open List Options GS & Co c/o Zurich Office (the "GS Account")." Does GS stand for Goldman Sachs one wonders? And while we commend the SEC on finally doing its job, our original question still stands: who leaked the details of the transaction one day before its formal announcement?
The details:
On February 14, 2013, Heinz announced that it had entered into a merger agreement to be acquired by an investment consortium comprised of Berkshire Hathaway and 3G Capital. The deal price of $72.50 per share represented nearly a 20% premium to Heinz's closing price of $60.48 on February 13.
In reaction to the Announcement, on February 14, Heinz's stock closed at $72.50 - an increase of $12.05 per share, or approximately 20%, over the previous trading day's closing price of $60.48. The trading volume in Heinz also skyrocketed on February 14, reaching over 64 million shares, an increase of over 1,700%. Prior to the Announcement, Heinz's stock had consistently traded at just around or below $60 per share since November 2012.
On February 13, the last trading day before the Announcement, one or more unknown traders, using the GS Account, purchased 2,533 out-of-the-money June $65 calls. This was effectively a wager that Heinz's stock, which had consistently traded around $60 per share for the last four months, would increase in value by approximately $5, or nearly 7.5%, over the next four months.
Equity call options,like the ones traded by Defendants, give the buyer the right, but not the obligation, to purchase a company's stock at a set price (the "strike price") for a certain periodof time (through "expiration"). In general, one buys a call option, or call,when the stockprice is expected to rise, or sells a call whenthe stockprice is expected to fall. For example, one "June 2013 $65" call on Heinz stockwouldgive the purchaser the right to buy 100 shares of that stock for $65 per share before the call expired on the Saturday following the third Friday of the referenced month, or, in this case, June 22, 2013. If at the time of purchase the call strike price is above the price at whichthe stock is then trading, the call is "out-of-the-money" because it would be unprofitable to exercise the call and pay more for the stock than if it were purchased on a stock market.
The purchase of 2,533 Heinzcalls with a strikeprice of $65 on February 13 was unusual giventhe historical options data for those calls. For example, on February 12 only 14 June $65 calls were purchasedand on February 11 no June $65 calls were purchased. In fact, since November 14, 2012, not more than 61 of these contracts had been purchased on any other single day.
As a result of the Announcement, the price of June $65 calls shot up from a close of $0.40on February 13 to a close of $7.33 on February 14, an increase of over 1,700%.
Between September 1, 2012 and February 13, 2013, the GS Accounthad no prior trading history in Heinz.
The timing, size and profitability of the Defendants' trades, as well as the lack of prior history of significant trading in Heinz in the GS Account, make these trades highly suspicious. In particular, after not trading Heinz securities in the GS Account for at least six months, Defendants invested nearly $90,000 in risky option positions the day prior to the Announcement. As a result of this well-timed trade, the Defendants' Heinz position increased from approximately $90,000 to over $1.8 million, an increase of nearly 2,000%) in just one day.
On information and belief, the unknown traders of Heinz securities were in possession of material, nonpublic information about the proposed acquisition of Heinz at the time they made the purchases alleged in this Complaint.
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And a slap on the wrist will ensue.
There is a Goldman Sachs Bank, Zurich....
Nah, coincidence...
http://www.schweizer-banken.info/en/bank/zh/zurich/goldman-sachs.htm
has goldman approved this action by the sec?
I'm thinking its a rogue intern, because most legitimate banksters come up with creative names, like Timberwolf or something.
Meanwhile Billy John is safely tucked away in his Naples cottage http://binged.it/VkZOfY having sold the family jewels for a pittance and irony of ironies his cottage is full frontal to a nasty Red Tide. http://www.naplesnews.com/news/2013/feb/14/dead-fish-on-naples-beaches-r...
In NYT Dealbook they quote Billy John has having lunched at the 0,0001% Prt Royal Club in Naples back in December - but according to Billy John they never talked about this deal and instead discussed how to dispense ketchup onto Lemann's burgers. No question that those at adjacent tables would have thought anything of Senor 3G and Billy John, no question at all
http://dealbook.nytimes.com/2013/02/14/berkshire-and-3g-capital-to-buy-h...
I sense another Waddell & Reed type witch hunt/fall guy in the works.
Get to work, Mary Jo White!
I'm shocked, shocked I say!!! Pop the fucking Champagne!! They are going after Johny Ugly Duck, who zipped in a whopping 2 million profit!! Fish On MFER's!!
Fucking Trillion's vanishing into so called thin air while dumbo place mat run's around sniffing bycycle seat's. Johnny "Rambone" Corzynski fucking slaughter's rancher's, eat's their cattle off the hoof, fuck's the sheep through the fence, and not a peep. Where did it go, where did he go?
Johnny "Ugle Duck" should just tie a cement block onto his sheep's hoof and jump off a short bus into the deep end. They gotta find a patsy to take down for the MSM headlines somehow.
2 Million................Un-fucking beleivable!!!
I though Insider Trading and Market Manipulation was legal in the US.
I though Insider Trading and Market Manipulation was legal in the US.
Only for members of Congress and their friends, and for the too Big To Jail banksters. someone's gonna have egg on their faces on Monday morning when they get the flag-off from the PTBs.
"An over-eager junior enforcment agent thought he had evidence of wrongful trading, and acted on that belief. As he's new to the job, we counseled him to not make such allegations public until he's cleared it with the senior officers, so that we can esplain when there may be a rule or situation where the activity is not what it appears to be, and thus not a violation of law. The agent was commended for his zeal on the public's behalf, and assigned to a newly created Professional Instruction class, and in 6 months we expect him to be a much better agent."
The janitor will get a pink slip and everyone above the secretary pool level will get a bonus. SNAFU
Rumor has it that they have a tentative deal on this one already worked out.
And as for criminal convictions over the Heinz affair? They'll be making you wait.
http://www.youtube.com/watch?v=uoLoyg3JKRQ < (Heinz 'Anticipation' ad)
The SEC admits no wrongdoing, and pays Goldman Sachs $100m?
The SEC is still trying to catch up.
I think so, as I'm hearing that the fines for this infraction are not to exceed 15% of the proceeds on the trade.
WTF?????????????????????????????????????????????????
You mean an acquisition by JP Morgan Buffett is suspect?
Sacre bleu!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Moi virgin keyboard!!!!!!!!!!!!!!!!!!!!!!!!!
COMEDY GOLD: Mark To Market With Alan Grayson
That was a really quick reaction though...maybe the traders weren't on the "Approved Insider Traders" list.
If you're on the 'friends of' lis you can do ANYTHING..... literally. Remember all those shorts on airlines just before 9/11?
Meanwhile in Police State USA:
FBI Says 'FUCK YOU' To Transparency Request On Tracking U.S. CitizensFascism is doing well in America.
No doubt "Die Fahne Hoch" will be on school curriculums before you know it.
Die Fahne hoch! Die Reihen fest geschlossen!
SA marschiert mit ruhig festem Schritt.
Kam'raden, die Rotfront und Reaktion erschossen,
Marschier'n im Geist in unser'n Reihen mit.
Kam'raden, die Rotfront und Reaktion erschossen,
Marschier'n im Geist in unser'n Reihen mit.
Die Straße frei den braunen Batallionen.
Die Straße frei dem Sturmabteilungsmann!
Es schau'n aufs Hakenkreuz voll Hoffnung schon Millionen.
Der Tag für Freiheit und für Brot bricht an!
Es schau'n aufs Hakenkreuz voll Hoffnung schon Millionen.
Der Tag für Freiheit und für Brot bricht an!
Zum letzten Mal wird Sturmalarm geblasen!
Zum Kampfe steh'n wir alle schon bereit!
Schon flattern Hitlerfahnen über allen Straßen.
Die Knechtschaft dauert nur noch kurze Zeit!
Schon flattern Hitlerfahnen über allen Straßen.
Die Knechtschaft dauert nur noch kurze Zeit!
Die Fahne hoch! Die Reihen fest geschlossen!
SA marschiert mit ruhig festem Schritt.
Kam'raden, die Rotfront und Reaktion erschossen,
Marschier'n im Geist in unser'n Reihen mit.
Kam'raden, die Rotfront und Reaktion erschossen,
Marschier'n im Geist in unser'n Reihen mit.
That seems unnecessarily harsh. After all, the traders - "whoever they were" - were merely providing liquidity to the market. See, it was all for the common good.
In other news, re-election campaign funding got off to a flying start to 2013 earlier today...
I am glad the fucking SEC took the pump to their fucking balls for once.
Now, really fucking impress me and throw fucking Blankfein and the entire fucking executive branch of Goddamn Sachs in drive a fucking bus up your ass prison.
Fuck you Goldman. Fucking bitch ass pricks
My guess is that the "unknown" traders will continue to be "unknown" as it is probably SEC policy to first assess how important and politically connected the traders are before referring cases to the DoJ. It is, after all, eliminating government waste to adopt another agencies industrial protectionist policies. Even if the case isn't referred to the DoJ, they can still file a civil suit for $500k which will recover 25% of the profit. They have to get their cut somehow.
My guess is that the "unkown" traders will continue to be "unknown" as it is probably SEC policy to first assess how important and politically connected the traders are before referring cases to the DoJ. It is, after all, eliminating government waste to adopt another agencies industrial protectionist policies. Even if the case isn't referred to the DoJ, they can still file a civil suit for $500k which will recover 25% of the profit. They have to get their cut somehow.
David Sokol Trade?
Brazzers must be undergoing maintenance.
Surely not Goldman, otherwise it will be a slap on the wrist and told not to do that again. Anyone else... jail time bitchez!
musta been the secretarys
Youporn.com must have been down for maintanence.
No admission of wrongdoing, settlement for a fraction of profits made.
In Australia, the regulators have openly admitted they can't get anyone convicted for insider trading unless the criminals confess. Seriously.
"Certain Unknown Traders"
Quick, find some junior sycophant to string up.
If they are Unknown, who are they charging? And who makes the money on the trade if they're unknown. Enquiring fukking minds want to know. But then again, the Pope quit God. Anything is possible.
It was Jesse Jackson, Jr., and all he was trying to do was raise funds to buy all "students" an iPad.
May be it was Warren Buffett or his farmer son.
Warren "Buehler"
Guilty! $100 fine plus court fees. You can take that out of the $1.8 million you just made.
Nah, the taxpayer will have to pitch in $70 of that.
I'm sure GS stands for "Guy Smiley".
These are not the Goldmans you are looking for..
or Get Smart
'Gold Sucks' -- official policy, you know.
Gonorrhea Stings...
paging Fabrice Tourre
We are going to find out it was a congressman that is exempt from insider trading rules.
Probably Nancy Pelosi. She's trying to make as much as she can before her salary is cut thanks to sequestration.
I'm going with Colonel Mustard, in the Billiards Room, with the Candlestick.
(or some other fiction).
'Probably Nancy Pelosi. She's trying to make as much as she can before her salary is cut thanks to sequestration.'
Her $14.5K a month gets cut to a niggardly $13.3K.
Can you spare some cat food for a hungry KongressKlown?
Over 1K/month decrease? How shall she live(above the peasants)?
To say Nancy Pelosi is a parasite in pond scum is an insult to parasites in pond scum.
Like, John Kerry, for example. You know, the guy married to the Heinz lady.
KA-CHING!
Sec State plus more billions.
Lord, please send more asteroids!
charged w/insider trading using options? its about FUCKING TIME!!!!
Hmmm, a tipster connected enough, arrogant enough and fucking stupid enough to believe he could pull this off.......John Kerry?
Asides from my conspiracy theory that actually would be my first guess. All US politicians are above the law don't you know that? They know it, I don't know why the rest of us don't? LOL.
Hitlary - cattle contracts, Heinz calls - WHAT'S THE DIFFERENCE!
Blonde ambition.
Is this like the FBI setting up people and then busting them becase THERE ARE NO REAL FUCKING TERRORISTS that aren't with the US gov't within the US borders so the FEDS gave $ to someone to do this and now the fucking clowns at the SEC look like they're doing their jobs?
The GS stands for Giant Squid.
La Piovra
Btw, which Market Maker got hammered shorting the $90k of OTM calls?
And will he be required to give back the profit he made laying off the bet?
Heinz ketchup drinking game!
Corzine?
Has anyone seen that douchbag lately?
Personally, I'm worried about him. He's so far up Obama's ass, the air supply must be short there.
"Quick, Becky, I want to smother you in Heinz ketchup."
Love,
WB
Generic ketchup for me from now on, and never I liked Heinz 57.
Can't bring myself to buy anything that would benefit that old codger crony capitalist.
I wonder who spilled the beans to the SEC...
No doubt it'll ketchup with him and he'll end up being canned.
Now that they have identified the suspects- TPTB can give them their bonuses!!!
In the SEC history of Penalty to Profits, they should charge them about 5 bucks for this
Just tell'em Skeletor Yawn Ferry told you to do it and no laws will have been broken since toupee wearing Secretary of States can do whatever they want.
Allegation > Investigation > News Conference > Lack of Convictable Proof > News Conference > No one in jail > Lather, Rinse, Repeat
$1.8M is chump change. A tiny bit out of the bonus pool to give the SEC some headlines that they are "on the ball ! ". Picking up pennies while banksters stroll by with $100 bills hanging out of their pockets. Some muppet intern named Blue Horseshoe will take the fall. Way too obvious and easy. A financial False Flag event.
George Smith
Gabriel Saunders
Galahad Scrivens
Gallagher Sharkie
Gandhi Staines
Gerald Swallow
???
Wow.. 2 days to find a culprit in insider trading with friggin ketchup...how long has the cling-on group CFTC "investigating" silver manipulation?
I guess that tongue lashing Elizabeth Warren gave at this hearing had some effect.
http://www.upworthy.com/elizabeth-warren-asks-the-most-obvious-question-...
She lays into them good at the 1:20 minute mark of that video.
Speaking of cunts.
We get this winner out of Nancy Pelosi today.
http://thehill.com/homenews/house/283341-pelosi-congressional-pay-cut-un...
House Minority Leader Nancy Pelosi (D-Calif.) said Thursday that she opposes a cut in congressional pay because it would diminish the dignity of lawmakers' jobs.
Where to start...........
Q.
Does anyone know the difference between Nancy Pelosi and a pile of infected shit left from a deceased Ebola victim in Africa?
A.
Nancy's not in Africa.
Gods Son ?????
Buffet a 'Value Investor' my ASS!
He values catsup.
He values catsup.
Whoever it is they are pretty stupid - they should have bought at least 10x if not 100x the ammount - THAT would make them too big to jail.
So not only was GS telling their clients to sell Heinz from $56 all the way up to $60/share when they knew the buy from Buffet and the Brazilians was coming, but they wanted to cash in on some call options too.
"Well, by golly clients (Muppets), looks like Heinz is the worst in this sector, you'd better SELL."
Hum...hum...
GREED.
Looks suspicious, though perhaps they just had a hellacious plate of french fries at lunch and were inspired to make an impulse trade. Despite the skulduggery, one marvels at the large rocks required to establish such a blatant position in an identified options account. Most would have used their wife's 403(b) accounts.
The account was held at GS Bank in Zurich, a unit of Goldman Sachs Group Inc., GS -0.60% and the unknown traders allegedly made an investment of nearly $90,000 in Heinz June call options on the last day of trading before the deal was announced. "We're cooperating with the SEC's investigation," a Goldman Sachs spokeswoman said Friday.
From the WSJ, http://online.wsj.com/article/SB1000142412788732347800457830650028094267...
Shocked! Shocked!!!
Fucking vampires! Execute these fucking criminals!!!
If insider trading was still a crime there would be nobody left to trade. That's the truth right there.
Awwww so sad.
Maybe so but as long as they try to put up the false facade that it is not, it is our duty to keep calling them on it until they are forced to tell the truth. Once that oh shit moment registers with enough people, things change and maybe for the better.
maybe it was a BRK insider, maybe even WB himself, that sought to reduce the purchase cost of $72 by the profit on the call options. these call options might be the tip of the iceberg in all kinds of HNZ paper (CDS, bonds, fx contracts..etc etc)
if GS was the broker, it was only acting on God's instructions.
they didn't make that :>)
I think somebody in the SEC is looking for a job.
he/she will drop the charges if hired by GS or BRK?
Blue Horseshoe loves HNZ.
some brazilian insider guy.
Their morality standards are pretty low and the love brazzers!
Until they start disembowling in public, this is never gonna stop.
Even then it won't.
Statute of limitations is almost up for those responsible for the financial crisis, expect many more charges to be filed soon.
It's coming folks, wait and see.
Some coincidence Kerry becomes a cabinet member just in time to do a repeat performance of Hank Paulson. That is a windfall of tax evasion of his captiol gains on selling out to Buffett. Sure is nice to see the Limo-Lib working the system for fairness. How can these scum claim anything but to be the 1%.
Why hasn't Martha Stewart been scheduled for the Sunday morning talk shows? Maybe they'd also invite her Prosecutor? I'm sure they'd be able to explain how her crime was far greater than anything since!
Finally, some Kapitalism Ketchup to go with my Freedom Fries.