Former Wells Fargo broker embroiled in insider beef

Broker had a client invested in the private-equity shop that was acquiring Burger King Holding

Jan 14, 2014 @ 2:51 pm

By Mason Braswell

A former broker with Wells Fargo Advisors has been ordered to pay $5.6 million to settle charges of insider trading in shares of Burger King Holdings Inc., according to the Securities and Exchange Commission.

The SEC said that Waldyr Da Silva Prado Neto, a citizen of Brazil, misappropriated material nonpublic information from a customer and used it to trade Burger King stock options and tip others before the company's Sept. 2, 2010, announcement that it was being acquired by a New York private-equity firm.

The customer had invested $50 million in a fund managed by the private-equity firm that was used to acquire Burger King, according to the SEC, which said Mr. Prado made $175,000 in illicit profits and tipped at least four others living in Brazil and elsewhere. They made some $2 million in gains cumulatively, the SEC said.

“I'm in Brazil with information that cannot be sent by e-mail. You can't miss it,” Mr. Prado wrote in an e-mail to a friend, according to the SEC.

The judgment ordered Mr. Prado to disgorge $397,110 in ill-gotten gains from the illegal Burger King trading, prejudgment interest of $41,622 and $5,195,500 in penalties.

Mr. Prado could not be reached for comment. The SEC said in the complaint that he had fled to Brazil.

Wells Fargo was not named in the SEC's complaint. A representative of the firm said it had cooperated with the investigation but declined to comment further.

In August, the Financial Industry Regulatory Authority Inc. barred Mr. Prado from associating with any member firms.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

INTV

Why broker-dealers are on a roll

Deputy editor Bob Hordt and senior columnist Bruce Kelly discuss last year's bounce-back for IBDs.

Latest news & opinion

The unique nature of working with celebrity clients

Athletes and entertainers are just like everyone else — aside from complex tax issues, a lack of financial savvy and a need for prenups

Top 10 IBDs ranked by revenue

These independent broker dealers generated the most revenues in 2017.

8 podcasts advisers listen to when they aren't working

Listening to podcasts for the fun of it.

UBS continues to cut loans to recruits, while increasing compensation to brokers

The wirehouse reduced recruitment loans 20% and increased bonus loans 68% in the first quarter.

Things are looking up: IBDs soared in 2017

With revenue up, interest rates rising and regulation easing, IBDs are soaring.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print