SEC does its job and actually busts insider trading ? End of times must be coming....Did GS get caught trading dirty ? .

http://www.zerohedge.com/news/2013-02-16/goldman-implicated-heinz-insider-trading-probe

( More of God's work being done by GS... )

Goldman Implicated In Heinz Insider Trading Probe

Submitted by Tyler Durden on 02/16/2013 10:40 -0500

• Goldman Sachs
 
• goldman sachs
 
• Insider Trading
• None
 
• Reuters
 
• Securities and Exchange Commission
• Switzerland
 
• Zurich

When the news broke of the SEC's action against the HNZ call option insider traders, and we posted the full SEC charge against the perpetrators whose actions Zero Hedgereported on first, we asked this regarding one of the entities named: "the trade occurred through an "omnibus account located in Zurich, Switzerland in the name of GS Bank IC Buy Open List Options GS & Co c/o Zurich Office (the "GS Account")." Does GS stand for Goldman Sachs one wonders?" This followed our prior post, rhetorically titled "Guess Who Was Buying HNZ Stock From Its Clients", with the answer of course being Goldman Sachs, which had had HNZ stock at a Sell rating for months, and which just days before reiterated its negative sentiment. But for the most part the post was written in jest. Turns out the joke was on everyone else, because just as we feared, or rather knew, Goldman was indeed implicated all along.

From Reuters:

Goldman Sachs Group Inc is cooperating with a U.S. Securities and Exchange Commission probe into insider options trading in H.J. Heinz Co before the food company announced it was being acquired, Goldman said on Friday.

Earlier in the day, the SEC filed suit against unknown traders using an account in Switzerland to buy options in Heinz before the company was purchased. The SEC suit does not explicitly name Goldman Sachs but refers to the account in Switzerland as the "GS Account."

While none of this is surprising, we do find it curious that from "Vampire Squid", Goldman Sachs has now metastasized into "he who must not be named."

and.....






http://www.zerohedge.com/news/2013-02-15/sec-charges-heinz-call-buyers-insider-trading

SEC Charges Heinz Call Buyers With Insider Trading

Submitted by Tyler Durden on 02/15/2013 16:44 -0500

• Berkshire Hathaway
 
• Goldman Sachs
 
• goldman sachs
• Gross Domestic Product
 
• Insider Trading
 
• Switzerland
• Zurich

Yesterday, after the news of the Heinz acquisition hit the market just in time to wipe away the bitter aftertaste of the biggest GDP drop in Europe since 2009, we brought you the undisputed fact that someone made nearly $2 million in call options, which soared 1700% overnight and was bought the day before. It appears even the SEC finally is back to doing what its historic task was before it discovered internet porn, and one day after the report, has charged unidentified traders operating or trading out of Zurich, Switzerland with generating some $1.8 million in profits. Notably, the trade occurred through an "omnibus account located in Zurich, Switzerland in the name of GS Bank IC Buy Open List Options GS & Co c/o Zurich Office (the "GS Account")." Does GS stand for Goldman Sachs one wonders? And while we commend the SEC on finally doing its job, our original question still stands: who leaked the details of the transaction one day before its formal announcement?

The details:

On February 14, 2013, Heinz announced that it had entered into a merger agreement to be acquired by an investment consortium comprised of Berkshire Hathaway and 3G Capital. The deal price of $72.50 per share represented nearly a 20% premium to Heinz's closing price of $60.48 on February 13.

In reaction to the Announcement, on February 14, Heinz's stock closed at $72.50 - an increase of $12.05 per share, or approximately 20%, over the previous trading day's closing price of $60.48. The trading volume in Heinz also skyrocketed on February 14, reaching over 64 million shares, an increase of over 1,700%. Prior to the Announcement, Heinz's stock had consistently traded at just around or below $60 per share since November 2012.

On February 13, the last trading day before the Announcement, one or more unknown traders, using the GS Account, purchased 2,533 out-of-the-money June $65 calls. This was effectively a wager that Heinz's stock, which had consistently traded around $60 per share for the last four months, would increase in value by approximately $5, or nearly 7.5%, over the next four months.

Equity call options,like the ones traded by Defendants, give the buyer the right, but not the obligation, to purchase a company's stock at a set price (the "strike price") for a certain periodof time (through "expiration"). In general, one buys a call option, or call,when the stockprice is expected to rise, or sells a call whenthe stockprice is expected to fall. For example, one "June 2013 $65" call on Heinz stockwouldgive the purchaser the right to buy 100 shares of that stock for $65 per share before the call expired on the Saturday following the third Friday of the referenced month, or, in this case, June 22, 2013. If at the time of purchase the call strike price is above the price at whichthe stock is then trading, the call is "out-of-the-money" because it would be unprofitable to exercise the call and pay more for the stock than if it were purchased on a stock market.

The purchase of 2,533 Heinzcalls with a strikeprice of $65 on February 13 was unusual giventhe historical options data for those calls. For example, on February 12 only 14 June $65 calls were purchasedand on February 11 no June $65 calls were purchased. In fact, since November 14, 2012, not more than 61 of these contracts had been purchased on any other single day.

As a result of the Announcement, the price of June $65 calls shot up from a close of $0.40on February 13 to a close of $7.33 on February 14, an increase of over 1,700%.

Between September 1, 2012 and February 13, 2013, the GS Accounthad no prior trading history in Heinz.

The timing, size and profitability of the Defendants' trades, as well as the lack of prior history of significant trading in Heinz in the GS Account, make  these trades highly suspicious. In particular, after not trading Heinz securities in the GS Account for at least six months, Defendants invested nearly $90,000 in risky option positions the day prior to the Announcement. As a result of this well-timed trade, the Defendants' Heinz position increased from  approximately $90,000 to over $1.8 million, an increase of nearly 2,000%) in just one day.

On information and belief, the unknown traders of Heinz securities were in possession of material, nonpublic information about the proposed acquisition of Heinz at the time they made the purchases alleged in this Complaint.