The international flair of the Securities and Exchange Commission continued on Wednesday when it filed suit against unnamed investors who bought Wimm-Bill-Dann Foods shares in the days before the PepsiCo agreed to buy the Russian beverage company.
As DealBook pointed out last week, the agency increasingly is going global with its insider trading cases.
The complaint, filed in Federal District Court in Manhattan, called the investors’ stock purchases “highly profitable and suspicious.” The unknown buyers acquired 400,000 American Depositary Receipts in Wimm-Bill-Dann from Nov. 29 to Dec. 1. Pepsi announced the deal, in which it paid $3.8 billion for a 66 percent stake, on Dec. 2.
The Russian company’s shares spiked 28 percent on the day of the announcement. “As a result, the unknown purchasers are in a position to realize total profits of approximately $2.7 million from the sale of the A.D.R.’s,” the S.E.C. said in its lawsuit.
The shares were purchased in an account maintained at SG Private Banking, the Swiss banking unit of Société Générale, according to the complaint, and the orders were routed through Instinet Europe. Brown Brothers Harriman & Company was the custodian of the shares.
The S.E.C. frequently files cases against unnamed purchasers in order to freeze the assets and keep the money in the United States.
It looks like regulators across the pond are looking to strengthen their own insider trading laws. On Wednesday, the European Commission suggested mandatory prison terms for insider trading and other abuses as part of measures aimed at bolstering market confidence.