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

Featured video

Events

5 tech innovations you can't afford to ignore

Technology innovation is always top of mind at Pershing. What does Pershing have on tap for 2018 and beyond.

Latest news & opinion

Wells Fargo weighs changes to wealth unit

The move would reflect the bank's effort to cut $4 billion in costs.

Advisers with billions in AUM leaving Wall Street

Merrill Lynch has seen two teams exit recently, each with more than $4 billion in client assets.

Small broker-dealers seek legislative relief from annual audits

Bills introduced in House, Senate would remove PCAOB requirement.

Meet our new 40 Under 40s

For a fifth year, InvestmentNews is proud to shine a spotlight on the amazing accomplishments and potential of top young financial professionals.

Merrill re-evaluates commission ban in retirement accounts

The wirehouse's wealth management group announces a fresh look at the ban now that the DOL rule is on the brink of death.

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