SEC Freezes Stockbroker’s Assets Alleging Illegal Trading of Burger King Stock

Andrew Klips |

SEC HeadquartersThe Securities and Exchange Commission has obtained an emergency order freezing the assets of Waldyr Da Silva Prado Neto, claiming that Prado was using non-public information to net gains ahead of the acquisition of Burger King (BKW) by private equity firm 3G Capital Partners Ltd. in 2010.  According to the SEC, the Brazilian citizen who was working for Wells Fargo (WFC) in Miami at the time snared about $175,000 in illicit profits and also informed at least four other clients of the deal before it became public.

The SEC said that Prado recently quit his job at Morgan Stanley (MS), offered his Miami home for sale and began transferring his assets abroad. SEC documents show Prado corresponding to fellow Brazilians in Portuguese telling them things such as, “I have some info” and “You have to hear this.”  The SEC said that one of the clients bought out-of-the-money call options on Burger King two days subsequent to a phone call.

Prado's emails and other communications may have been sent from Brazil and written in Portuguese, but our commitment to prosecute illegal insider trading on U.S. markets knows no geographic or language barrier," said Sanjay Wadhwa, deputy chief of the SEC enforcement division's market abuse unit. Wadhwa added, "Prado may have fled the country to evade justice, but our action today ensures that he will have to appear in a U.S. court if he wants his assets unfrozen."

Looks like a trader can’t always “have it his way” with Burger King.

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Companies

Symbol Name Price Change % Volume
KPT:CA KP Tissue Inc. 16.10 0.05 0.31 7,151
MS Morgan Stanley 43.63 0.05 0.11 9,148,284
WFC Wells Fargo & Company 57.11 -0.19 -0.32 14,323,369

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