A Cayman Islands entity at the center of a U.S. investigation into possible insider trading in ketchup maker H.J. Heinz said trades placed in its Swiss bank account were made without permission.
The filing by Alpine Swift late Monday deepened a mystery about who placed an options trade that resulted in profits of more than $1.7 million in the run-up to Heinz's announcement in February that it was being bought by Warren Buffett's Berkshire Hathaway and Brazil's 3G Capital.
The Securities and Exchange Commission sued unknown parties over the suspicious trading on Feb. 15, and shortly after a federal judge froze the assets in a Swiss bank account at Goldman Sachs.
The filings came in connection with a motion by Alpine to dismiss the case. A lawyer for the investment holding company became the first person to appear for the defense in the case last week.
Alpine Swift said it owned the bank account in court filings but that the trade was made by someone not allowed to do so.
"In fact, the trade was not authorized," Alpine's lawyers wrote. "It was placed by an individual who had no authority to place trades in Alpine's account."
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Alpine did not name the individual in its filings. A lawyer for Alpine, Juan Morillo of Cleary Gottlieb Steen & Hamilton, did not immediately respond to a request for comment Tuesday.
The court filings also gave a view into Alpine's complex structure. Alpine said it was established in 2010 and has a single shareholder, a discretionary trust called the Troika Trust. Troika was formed under Cayman Islands law and its sole purpose is "succession planning," the filings said.
An unnamed independent investment advisor, whose sole director is a Brazilian citizen, has full responsibility for investing the assets Alpine holds for the trust, according to the filings.
Alpine said its beneficiaries are Cayman Island companies wholly owned by another unnamed Brazilian citizen without authority to withdraw funds or place trades.
Alpine said it didn't know about the Heinz trading until after the SEC filed its lawsuit. It said that Goldman had told it that on Feb. 13, someone instructed the bank to buy 2,533 call options in Heinz via Alpine's account.
"This individual did not have a power of attorney or other authority to place transactions in Alpine's account and placed the Heinz transaction without Alpine's knowledge," the lawyers wrote.
The SEC's lawsuit said traders bought call options that climbed 1,700 percent after the formal announcement of the Heinz buyout.
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The SEC has received nearly 800 pages related to Alpine's Goldman account from the bank and delivered by the Swiss Financial Market Supervisory Authority, Alpine said.
The FBI had also said it was investigating the unusual trading activity, and Goldman Sachs had said it was cooperating with the SEC. Goldman, which did not immediately respond to a request for comment Tuesday, has not been accused of wrongdoing.
A spokesman for the SEC declined to comment.
—By Reuters