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SEC charges Brazilian exec $5.1 mil. for Burger King fraud
by Joseph Earnest December 3, 2012
Newscast Media WASHINGTON, D.C.—The Securities and Exchange Commission announced insider trading charges against a Brazilian ex-banker for his role in a scheme to illegally trade Burger King securities. The SEC alleges that Igor Cornelsen and his firm through which he made trades - Bainbridge Group - reaped illicit profits of more than $1.68 million by trading Burger King options based on confidential information ahead of the company's September 2010 announcement that it was being acquired by a New York private equity firm.
Click here to read or download entire SEC complaint. (pop-up)
Cornelsen is now a resident of the Bahamas with a home in South Florida after holding high-ranking positions at several banks in Brazil before his retirement. 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?" 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.
"Cornelsen shamelessly prodded Prado for details on 'the sandwich deal' and Prado happily obliged to satisfy his customer's appetite for inside information," said Daniel M. Hawke, Chief of the SEC Enforcement Division's Market Abuse Unit and Director of the Philadelphia Regional Office.
Sanjay Wadhwa, Deputy Chief of the Market Abuse Unit and Associate Director of the New York Regional Office, added, "Foreign investors who access the U.S. capital markets must play by the rules and not rig the market in their favor, otherwise they face getting caught by the SEC and paying a hefty price as Cornelsen is here."
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