Heinz insider trading probe moves to UK

Michael Bow
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US regulators investigating possible insider trading on the $28bn (£18bn) takeover of Heinz are thought to have turned the attention of their probe to trades routed through London.

The Securities and Exchange Commission (SEC) filed documents with courts two weeks ago against unknown traders suspected of making over $1.7m from a 20 per cent jump in Heinz’s share price after the deal was announced.

Ketchup maker Heinz was taken over earlier this month by Warren Buffett’s investment outfit Berkshire Hathway and 3G Capital, a Brazilian private equity company.

The SEC, the American financial watchdog, is understood to have widened its probe to look at trades routed through London, it emerged last night. The SEC declined to comment, instead referring to the original court filing. The London-based probe is thought to focus on contract for difference (CFD) securities, which allow people to bet on the rise and fall of share prices.

In a separate development yesterday, the European Banking Authority and European Securities and Market Authority issued a warning to investors about CFDs.