The US Securities and Exchange Commission has begun legal proceedings against unidentified buyers of Wimm-Bill-Dann securities after allegations of insider trading ahead of the Russian dairy company’s proposed sale to PepsiCo.
The commission filed a complaint yesterday (8 December) alleging that the “unknown purchasers” engaged in illegal insider trading in the last three days before the announcement that PepsiCo intended to acquire a 66% interest in WBD for US$3.8bn.
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According to the allegations, the “unknown purchasers” placed orders to buy 107,500 ADRs on 29 November, another 132,500 ADRs on 30 November and an additional 160,000 ADRs on 1 December.
Following the announcement of the deal, the price of WBD shares increased 28% for the day, so the “unknown purchasers” are in a position to realise total profits of approximately $2.7m from the sale of the ADRs, the SEC alleged.
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