Here’s Why the SEC May Suspect Insider Trading in the Berkshire-Heinz Deal

On Thursday, Heinz (NYSE:HNZ) announced that it had entered into an agreement with Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB) and 3G Capital to be acquired for $72.50 per share. The total value of the transaction, which will take the iconic American food company private, is about $28 billion, which would make it the largest recorded acquisition in the food industry if it stands up to regulatory scrutiny.

Unsurprisingly, the news made tremendous waves. The buyout price represented a 20 percent premium over the stock’s all-time high. Investors were already attracted to the company because of its highly-reliable growth over the past few years — shares advanced 120 percent from March of 2009 through this February, climbing with a beta of just 0.36, indicating that the stock was resistant to market fluctuations. The price movement was supported with steady annual revenue gains and consistently strong earnings.

All in all, the deal came as a surprise but it was not shocking. Heinz fits the profile of companies that Warren Buffet, who heads Berkshire Hathaway, likes to focus on. 3G Capital also signaled its interest in getting more involved in the food industry a while ago. And while the premium may be high, there’s little doubt that it’s worth every penny.

But like every good story, the Heinz deal, which helped curb broad market pessimism on Thursday, is surrounded by an air of scandal. Reports have circulated indicating that the Securities and Exchange Commission has begun investigating unusual trading activity on the day preceding the announcement…