The SEC summoned the unidentified traders that executed suspicious trades on Heinz stock earlier this month to a New York City Court on Friday. The problem is, the unknown traders didn't show.
On February 14th, Warren Buffett announced that he and Brazilian billionaire Jorge Lemann would buy Heinz for $23 billion. The day before, there was a surge in the purchase of options to buy Heinz stock — and they all seemed to come from the same place.
That place was a Swiss Goldman Sachs account and, according to Bloomberg, Judge Jed Rakoff, infamous for his tough stance on Wall Street crime, has ordered that the account be frozen.
“They can hide, but their assets can’t run,” Rakoff announced, saying he had granted the SEC’s request and signed the freeze order...
“It appears that the defendants known as ’Certain Unknown Traders in the Securities of H.J. Heinz Co. (HNZ)’ have chosen to remain unknown, at least in terms of any appearance today in court,” Rakoff said. “The matter is called. It’s now 2:22 and no one has appeared.”...
“So, there appears to be no opposition to the proposed order that would freeze on a more permanent basis pending further proceedings of the amount in question and also prohibits the destruction of records,” Rakoff said. “I find that the relief was very well warranted and so I have signed the propose order.”
After the Heinz deal was announced, the company's stock surged from $60.48 to $72.50. The traders had purchased the option to buy Heinz stock at $65, and had invested $90,000 into the trade.
Goldman Sachs has said it is cooperating with authorities, but that it does not have "direct access" to the owner behind the transactions in the account.
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