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

Crossmark's Rentfrow: Why should advisors care about responsible investing?

There are lot of misconceptions when it comes to socially responsible investing. Crossmark's David Rentfrow debunks the myths and discusses opportunities for advisers.

Latest news & opinion

Meet our 2017 Women to Watch

Introducing 20 female financial advisers and industry executives who are distinguished leaders, advancing the business of providing advice through their creativity and hard work.

Raymond James executives call on industry to keep broker protocol

Also ask firms to pay for the administration of the protocol to 'ensure its longevity and relevance.'

Senate committee approves tax plan but full passage not assured

Several Republican senators expressed reservations about the bill, and the GOP cannot afford too many defections.

House passes tax bill, focus turns to Senate

Tax reform legislation expected to have more of a challenge in upper chamber.

SEC enforcement of advisers drops in Trump era

The agency pursued 82 cases against advisers and firms in fiscal year 2017, down from 98 the previous year.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print