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UPDATE 1-SEC files lawsuit over Heinz option trading

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Published: Friday, 15 Feb 2013 | 4:45 PM ET

* Says insider trades made via Swiss account

* Gets order to freeze account's assets

Feb 15 (Reuters) - U.S. securities regulators on Friday filed suit against unknown traders in the options of ketchup maker H.J. Heinz Co, alleging they traded on inside information before the company announced a deal to be acquired for $23 billion by Warren Buffett's Berkshire Hathaway and Brazil's 3G Capital.

The suit, filed in federal court in Manhattan, cites "highly suspicious trading" in Heinz call options just prior to the Feb. 14 announcement of the deal.

It claims the traders are either in, or trading through accounts in, Zurich, Switzerland.

On Wednesday, there was a sudden burst of bullish call options buying, expecting that H.J. Heinz shares would rally in coming months. After the deal was revealed Thursday, options market experts called Wednesday's trading "suspicious and incredibly well-timed."

The SEC has obtained an emergency order to freeze assets in a Swiss account linked to the trading.

"Irregular and highly suspicious options trading immediately in front of a merger or acquisition announcement is a serious red flag that traders may be improperly acting on confidential nonpublic information," Daniel M. Hawke, Chief of the SEC's Division of Enforcement's Market Abuse Unit said in a statement.

Representatives of Heinz, Berkshire Hathaway and 3G were all unavailable for immediate comment.

The suit is Securities and Exchange Commission vs. Certain Unknown Traders in the Securities of H.J. Heinz Co, U.S. District Court, Southern District of New York, No. 13-1080.

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Feb 15- U.S. securities regulators on Friday filed suit against unknown traders in the options of ketchup maker H.J. Heinz Co, alleging they traded on inside information before the company announced a deal to be acquired for $23 billion by Warren Buffett's Berkshire Hathaway and Brazil's 3 G Capital.
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