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Tuesday, July 23, 2024 | Back issues
Courthouse News Service Courthouse News Service

Inside Trader Must Cough up $5 Million

MANHATTAN (CN) - A Brazilian banker with a home in Florida and the Bainbridge Group will pay $5.1 million to settle charges of inside trading in (nonparty) Burger King shares, the SEC said.

Igor Cornelson and Bainbridge, the firm through which he made the trades, made illicit profits of $1.7 million, the SEC said in a statement announcing its settled complaint.

Cornelson traded ahead on Burger King options in September 2010 on information that the company was being bought by a New York private equity firm, the SEC said.

Cornelson, a resident of the Bahamas who has a home in South Florida, held "high-ranking positions at several banks in Brazil" before he retired, the SEC said.

"He sought inside information from his broker Waldyr Da Silva Prado Neto by sending him e-mails with such masked references as, 'Is the sandwich deal going to happen?'" the SEC said in its statement. "Prado was stealing the inside information from another Wells Fargo brokerage customer involved in the Burger King deal.

"Cornelsen and Bainbridge Group agreed to pay more than $5.1 million to settle the SEC's charges. The settlement is subject to court approval. The litigation continues against Prado, whose assets have been frozen by the court."

According to the SEC, "Cornelsen shamelessly prodded Prado for details on 'the sandwich deal' and Prado happily obliged to satisfy his customer's appetite for inside information."

Under the proposed final judgment, the two defendants, jointly and severally, will disgorge $1,681,090 plus $136,521 in prejudgment interest. Cornelson is ordered to pay $3,362,180." As is usually the case with the SEC, the defendants do not have to admit that they did anything wrong.

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