Posted On: 01/30/2014 6:03:48 AM
Post# of 94181
Two Charged With Insider Trading on Burger King -- Update
By Julie Steinberg and Michael Calia
Federal prosecutors on Monday said they have charged two men for using inside information to trade Burger King Worldwide Inc. securities before the fast-food chain was purchased by 3G Capital in 2010.
Waldyr Prado, a former financial adviser at Wells Fargo & Co., and Igor Cornelsen, who owns and operates an investment firm in the British Virgin Islands, are both residents of Brazil and haven't been arrested, according to the U.S. Attorney for the Southern District of New York and the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation.
The criminal complaint alleges that Mr. Prado, in 2010, received information from a client who had knowledge of the developing 3G deal for Burger King and then bought securities in the restaurant company. Mr. Prado sold his holdings after the announcement of the deal on Sept. 2, 2010, according to prosecutors.
Mr. Prado notified Mr. Cornelsen about the progress of the deal, according to prosecutors. In turn, Mr. Cornelsen made a net profit of about $1.4 million from his Burger King investments, they said.
The charges, which were unsealed on Monday, were filed last September. Messrs. Prado and Cornelsen are being charged with conspiracy to commit securities fraud, securities fraud and fraud in connection with a tender offer.
The criminal charges follow civil charges filed in 2012 by the Securities and Exchange Commission against the two men for insider trading. Earlier this month, the SEC ordered Mr. Prado to pay nearly $6 million in penalties and disgorgements. The agency ordered Mr. Cornelsen and his firm to pay more than $5.1 million to settle the SEC's charges.
3G Capital completed its acquisition for Burger King for $4.1 billion in October 2010.
Mr. Prado, last year, was suspended by the Financial Industry Regulatory Authority, Wall Street's self-regulator, for failing to "comply with an arbitration award or settlement agreement or to satisfactorily respond to a Finra request to provide information concerning the status of compliance," according to a regulatory filing.
A spokesman for Wells Fargo said the firm cooperated with the SEC and the U.S. attorney in their investigations. A lawyer for Mr. Cornelsen couldn't immediately be reached. Mr. Prado couldn't be reached for comment, and his lawyer couldn't immediately be identified. A spokesman for 3G declined to comment.
Write to Julie Steinberg at julie.steinberg@wsj.com and Michael Calia at michael.calia@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
By Julie Steinberg and Michael Calia
Federal prosecutors on Monday said they have charged two men for using inside information to trade Burger King Worldwide Inc. securities before the fast-food chain was purchased by 3G Capital in 2010.
Waldyr Prado, a former financial adviser at Wells Fargo & Co., and Igor Cornelsen, who owns and operates an investment firm in the British Virgin Islands, are both residents of Brazil and haven't been arrested, according to the U.S. Attorney for the Southern District of New York and the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation.
The criminal complaint alleges that Mr. Prado, in 2010, received information from a client who had knowledge of the developing 3G deal for Burger King and then bought securities in the restaurant company. Mr. Prado sold his holdings after the announcement of the deal on Sept. 2, 2010, according to prosecutors.
Mr. Prado notified Mr. Cornelsen about the progress of the deal, according to prosecutors. In turn, Mr. Cornelsen made a net profit of about $1.4 million from his Burger King investments, they said.
The charges, which were unsealed on Monday, were filed last September. Messrs. Prado and Cornelsen are being charged with conspiracy to commit securities fraud, securities fraud and fraud in connection with a tender offer.
The criminal charges follow civil charges filed in 2012 by the Securities and Exchange Commission against the two men for insider trading. Earlier this month, the SEC ordered Mr. Prado to pay nearly $6 million in penalties and disgorgements. The agency ordered Mr. Cornelsen and his firm to pay more than $5.1 million to settle the SEC's charges.
3G Capital completed its acquisition for Burger King for $4.1 billion in October 2010.
Mr. Prado, last year, was suspended by the Financial Industry Regulatory Authority, Wall Street's self-regulator, for failing to "comply with an arbitration award or settlement agreement or to satisfactorily respond to a Finra request to provide information concerning the status of compliance," according to a regulatory filing.
A spokesman for Wells Fargo said the firm cooperated with the SEC and the U.S. attorney in their investigations. A lawyer for Mr. Cornelsen couldn't immediately be reached. Mr. Prado couldn't be reached for comment, and his lawyer couldn't immediately be identified. A spokesman for 3G declined to comment.
Write to Julie Steinberg at julie.steinberg@wsj.com and Michael Calia at michael.calia@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
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