Earlier this month, the US District Court for the Southern District of New York entered a $5.6 million judgment in favor of the Securities and Exchange Commission against Waldyr Da Silva Prado Neto (Prado), a Brazilian citizen formerly employed by Wells Fargo Advisors, LLC, for insider trading. The SEC alleged that in 2010, a customer informed Prado that private equity firm 3G Capital Partners Ltd. planned to acquire Burger King. According to the complaint, Prado then used the material nonpublic information to illegally trade Burger King securities, reaping $175,000 in profits, and he tipped at least four customers to do the same. The SEC alleged violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Section 14(e) of the Exchange Act and Rule 14e-3. The court granted the SEC’s request for a permanent injunction and entered an order requiring Prado to pay $5,195,500 in civil monetary penalties and disgorge $397,111 in illicit profits.
Securities and Exchange Commission v. Waldyr Da Silva Prado Neto, No. 12-CIV-7094 (S.D.N.Y. Jan. 7, 2014).