FBI Launches Criminal Probe Into Heinz Options Trading

--The FBI is probing a big options trade made a day ahead of the Heinz buyout

--The SEC last week moved to freeze assets in the Swiss account linked to alleged "highly suspicious" trading

--FBI says it is consulting with SEC to determine if a crime was committed

The Federal Bureau of Investigation has begun a criminal investigation into a big options trade made the day before last week's blockbuster $23 billion buyout of H.J. Heinz Co. (HNZ).

The move ratchets up the stakes for the traders who allegedly made the well-timed bet using a Swiss account.

Regulators with the Securities and Exchange Commission on Friday moved to freeze assets in the account linked to what the commission called the "highly suspicious" trading, which would have paid out $1.7 million in profits.

"The FBI is aware of the trading anomalies the day before Heinz's announcement," Martin Feely, an FBI spokesman in New York, said Tuesday in a statement. "The FBI is consulting with the SEC to determine if a crime was committed."

On Wednesday, an investor made an unusually large bet in lightly traded Heinz options, speculating the packaged-foods company's shares would gain more than 8.1% through mid-June.

By Thursday, that trade stood to pay off more than 18-fold after Heinz agreed to be acquired by Warren Buffett's Berkshire Hathaway Inc. (BRKA, BRKB) and private-equity firm 3G Capital, sending Heinz shares skyward.

The SEC said the timing and size of the trades were highly suspicious given the account had no history of trading in Heinz securities in the last six months.

Sanjay Wadhwa, the senior associate director of the SEC's New York regional office, said last week that the traders who utilized the Swiss account would "now have to make an appearance in court to explain their trading if they want their assets unfrozen."

The judge overseeing the SEC civil case has scheduled a hearing for Friday afternoon in Manhattan federal court on whether the freeze should remain in place.

The trades were done through an account at GS Bank in Zurich, a unit of Goldman Sachs Group Inc. (GS). Goldman wasn't accused of any wrongdoing. "We're cooperating with the SEC's investigation," a Goldman Sachs spokeswoman said Friday.

Berkshire Hathaway and 3G Capital said they would buy the ketchup maker for $72.50 a share, or more than $23 billion. Including debt assumption, the deal, which Heinz's board approved unanimously, is worth $28 billion.

In the options market Wednesday, an investor bought 2,533 "call" options, according to the SEC's complaint. Each contract would allow the investor to purchase 100 Heinz shares for $65 apiece through the middle of June.

Wednesday's trade in the June options helped push volume in Heinz options to nearly three times the daily average, according to options-data firm Trade Alert. Over the past month, Heinz options had averaged just 1,304 contracts traded daily, according to the data.

--Chad Bray contributed to this article.

-Write to Michael Rothfeld at [e-mail] and Kaitlyn Kiernan at [e-mail]

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