Heinz security guard accused of insider-trading plot
Violation of employment agreement, breach of trust among allegations in case
NEW YORK Todd David Alpert was a security guard for a board member of H.J. Heinz Co. in 2013 when federal regulators say he received an email from his employer spelling out terms of an impending takeover of the food company.
Starting the following day, the Securities and Exchange Commission alleged that Alpert called his broker and bought Heinz shares and options. After the announcement that an investment group including Warren Buffett’s Berkshire Hathaway Inc. and 3G Capital Inc. was buying Heinz, Alpert sold his position for a profit of US$44,000.
Alpert, of Kingston, Pa., was accused in a civil complaint filed Wednesday in federal court in Manhattan. The complaint indicated he asserted his right against self-incrimination when he was questioned by the SEC, and that he is unemployed.
The complaint alleged that Alpert provided security at the home of the unidentified Heinz director, who had been on the board of the company for “several years.” As part of his duties, he routinely printed out documents for the board member that he or his staff had sent to his email account.
The SEC said the board member sent several documents related to the deal for printing, including a letter marked “CONFIDENTIAL” containing the terms and the US$72.50-per-share price.
The complaint alleged that Alpert told the board member what he had done in July 2015. The board member viewed it as a breach of his trust and a violation of his employment agreement, according to court filings.
The case is reminiscent of one a decade ago, when prosecutors said a worker at a Wisconsin plant that printed Business Week made trades based on the names of stocks mentioned in editions before they were mailed out. (The magazine was subsequently acquired by Bloomberg LP.) Juan Renteria pleaded guilty in 2007, telling a Manhattan federal judge that he tipped another person, whom he didn’t identify, with the names of stocks mentioned in the Inside Wall Street column.
The Alpert case is the second alleging insider trading related to the US$28 billion takeover of Heinz. A pair of brothers from Brazil agreed to pay US$5 million in 2013 to resolve SEC claims that they traded on inside information ahead of the deal.