SEC charges ex-banker over Burger King insider trading
By Jonathan Stempel | December 1, 2012 7:21 AM EST
A former Brazilian banker agreed to pay $5.18 million to settle U.S. Securities and Exchange Commission charges of insider trading in Burger King Holdings Inc before the second-largest U.S. fast-food chain agreed to a 2010 buyout.
According to the regulator, the former banker, Igor Cornelsen, 64, prodded his broker, Waldyr Da Silva Prado Neto, for tips after Prado, who then worked at Wells Fargo & Co
Burger King agreed on September 2, 2010, to be bought by private equity firm 3G Capital Partners Ltd for $3.26 billion, or $24 per share.
That was about 46 percent above the share price when rumors that the maker of Whopper hamburgers might be acquired had surfaced two days earlier.
The SEC said Cornelsen had begun trading Burger King call options, a bet the stock would rise, on May 18, 2010, one day after Prado told him in an email written in Portuguese, "I have some info ... You have to hear this."
Cornelsen would subsequently seek tips by sending cryptic emails, saying such things in Portuguese as "Is the sandwich deal going to happen?" the SEC said.
Finally, the regulator said that upon realizing how much he had made after the takeover was announced, Cornelsen exclaimed in an email to Prado, in English this time, "Wow! What a day!"
Friday's settlement requires court approval. It calls for Cornelsen, a resident of the Bahamas, and his firm, Bainbridge Group Inc, to pay a $3.36 million fine, give up $1.68 million of illegal profit and pay $136,621 of interest.
James Benjamin, a partner at Akin Gump Strauss Hauer & Feld who represents Cornelsen, had no immediate comment.
The SEC filed related insider trading charges against Prado, 42, on September 20 and won a court order freezing his assets. It said that litigation is continuing.
Now called Burger King Worldwide Holdings Inc
(Reporting by Jonathan Stempel in New York; editing by Gerald E. McCormick and Matthew Lewis)
Most Popular Slideshows
- Prince William & Kate Middleton Caught Flirting In A Countryside Dinner Date [PHOTOS]
- Kate Middleton’s Mom Accused Of Being A Social Climber, Prince George Not Seen By Relatives
- 2014 US Open: Hottest Female Tennis Athletes [PHOTOS]
- Prince William & Kate Middleton Boards London Train in Casual Disguise, Royal Couple’s Incognito Plan A Huge Hit [PHOTOS]
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- 5.5-Inch iPhone 6 is iPhone Air on Sept 19 Release Date: 5 Things to Consider Before Buying
- Pricey iPhone 6 on Release Date Likely but with 3X Retina Resolution & Mobile Payment Service – Reports
- Nexus 6 Release Date Update: Moto X+1 Look Leaked, Nexus X or Shamu Moved to Demo Phase
- Google Nexus 8 Confirmed as HTC T1 aka Volantis/Flounder with Freshly-Leaked Specs & Features – Reports
- HTC One M8 for Windows Vs. Nokia Lumia Icon, The Battle Of Windows Phones
- Europe, US Next on ISIS’ Hit List, Says Saudi King; Seized ISIS Laptop Reveals Terrifying Bio-Warfare Plans
- iPhone 6 On Release Date To Feature Qualcomm MDM9625M LTE, 1GB RAM, Mobile Payment Deal With AMEX, 1334x750 Display