SEC Settles with Previously Unknown Insider Traders Michel and Rodrigo Terpins

SEC v. Michel Terpins and Rodrigo Terpins, Case No. 13-cv-1080 JSR (S.D.N.Y.).  On October 10, 2013, the SEC announced that brothers Michel and Rodrigo Terpins have agreed to pay almost $5 million to settle insider trading charges for trading in call options for H.J. Heinz Company the day before the company publicly announced its acquisition. On February 15, 2013, the SEC filed an emergency action against unknown traders in order to freeze assets in a Swiss-based trading account used to make more than $1.8 million from trading in advance of the Heinz announcement.  In an amended complaint filed on October 10, 2013, the SEC alleges Rodrigo Terpins placed the order for Heinz options while he was on vacation in the United States based on inside information that he got from his brother Michel Terpins.  The trades were made through an account belonging
to a Cayman Islands-based entity named Alpine Swift, which was named as a Relief Defendant, that holds assets for one of their family members.  According to the SEC, before the February 14 announcement that Berkshire Hathaway and 3G Capital agreed to acquire Heinz in a deal valued at $28 billion, Michel Terpins learned that an investment consortium including 3G Capital was about to announce a major acquisition.  He learned that the deal involved Heinz.  He then provided tipped Rodrigo Terpins, who placed the trades.  As part of the settlement, the brothers will disgorge $1,809,857 in profits made and will pay $3 million in penalties.  In addition to the monetary sanctions, Rodrigo and Michel Terpins consented, without admitting or denying the allegations, to permanent injunctions against future violations of Section 10(b) of the Exchange Act and Rule 10b-5.

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