SEC v. Waldyr De Silva Prado Neto, Case No. 12 CIV 7094 (S.D.N.Y.). On September 20, 2012, the SEC announced it obtained an emergency court order to freeze the assets of a stockbroker who used nonpublic information from a customer and engaged in insider trading. The case concerns insider trading by Prado in the securities of Burger King Holdings, Inc. (“Burger King”) before Burger King’s announcement that it would be acquired by a private equity firm for $24 per share. After the announcement, the closing price of Burger King’s stock increased approximately 43% over its closing price two days prior and approximately 25% over its closing price the day before the announcement. Prado was a registered representative at Wells Fargo Advisors, LLC and misappropriated inside information about the Burger King deal from a brokerage customers who invested at least $50 million in the fund used to acquire Burger King. Prado used this information to trade Burger King securities, and tipped at least four other customers. Prado obtained about $175,000 in illicit profits.
Prado is charged with violating Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-13 thereunder. The SEC seeks injunctive relief, disgorgement with prejudgment interest and civil monetary penalties.