SEC files insider-trading case in PepsiCo deal

NEW YORK (BestGrowthStock) – U.S. securities regulators filed an insider-trading lawsuit against unnamed defendants, citing suspicious purchases of Wimm-Bill-Dann Foods shares ahead of news that the Russian company would be acquired by PepsiCo Inc.

The “unknown purchasers” bought 400,000 American depositary receipts of Wimm-Bill-Dann between November 29 and December 1, the U.S. Securities and Exchange Commission said. The Pepsico deal was announced publicly on December 2.

The investors are in a position to reap profits of $2.7 million, according to the SEC complaint, filed on Wednesday in U.S. District Court in Manhattan.

The agency typically sues unnamed investors to freeze assets and prevent money from leaving the United States. The commission said it is asking for disgorgement of profits and civil penalties.

PepsiCo announced plans to buy Wimm-Bill-Dann, a dairy and fruit juice company, before the U.S. stock market open on Dec 2. After the announcement, Wimm-Bill-Dann ADRs jumped 28 percent, topping the list of the market’s biggest gainers, the SEC said.

“There was no public information available concerning the contemplated acquisition before the unknown purchasers bought Wimm-Bill-Dann securities,” the SEC said in its complaint.

The investors’ ADR purchases on November 29 made up 23 percent of the total trading volume of Wimm-Bill-Dann ADRs that day, the SEC said.

According to the SEC, the ADRs were bought through an account at SG Private Banking (Suisse), a unit of Societe Generale in Geneva, Switzerland. The ADRs were routed through an Instinet Europe Ltd account, the agency said.

The case is SEC v. One or More Unknown Purchasers of Securities of Wimm-Bill-Dann Foods, U.S. District Court for the Southern District of New York, No. 10-9159.

(Reporting by Dena Aubin; editing by John Wallace)

SEC files insider-trading case in PepsiCo deal