NEW YORK – A Cayman Islands entity at the center of a U.S. investigation into possible insider trading in ketchup maker H.J. Heinz Co said trades placed in its Swiss bank account were done by someone without permission.
The filing by Alpine Swift Ltd late on Monday deepened a mystery over who placed an options trade that resulted in more than $1.7 million in profits in the run up to Heinz's February announcement that Warren Buffett's Berkshire Hathaway Inc and Brazil's 3G Capital would buy it.
The U.S. Securities and Exchange Commission sued unknown traders over the suspicious trading in February. Soon after, a federal judge froze the assets at a bank account at Goldman Sachs & Co in Switzerland.
The filings came in connection with a motion by Alpine to dismiss the case.
A lawyer for Alpine Swift, an investment holding company, became the first person to appear for the defense in the case last week.
Alpine Swift said it owned the bank account in court filings, but it also said the trade was done by someone who lacked permission to make the trade.
"In fact, the trade was not authorized," Alpine's lawyers wrote. "It was placed by an individual who had no authority to place trades in Alpine's account."
Alpine did not name the individual in its filings. A lawyer for Alpine, Juan Morillo of the global law firm Cleary Gottlieb Steen & Hamilton, did not immediately respond to a request for comment on Tuesday.
The court filings also gave a view into the complex corporate structure behind Alpine, which has links to Brazil, where 3G Capital is based.
Alpine said it was established in 2010 and has a single shareholder, a discretionary trust called the Troika Trust. The trust was formed under Cayman Islands laws and its sole purpose is "succession planning," the filings said.
An unnamed independent investment adviser, whose sole director is a Brazilian citizen, has full responsibility for investing the assets Alpine holds for the trust, the court filings said.
Alpine said its beneficiaries are Cayman Island companies wholly owned by another unnamed Brazilian citizen. The Brazilian has no authority to withdraw funds or place trades, Alpine said.
In the court filings, Alpine said it didn't know about the Heinz trading until after the SEC filed its lawsuit. The company said Goldman told it that on February 13, someone instructed the bank to buy 2,533 call options in Heinz via Alpine's account.
"This individual did not have a power of attorney or other authority to place transactions in Alpine's account and placed the Heinz Transaction without Alpine's knowledge," Alpine's lawyers wrote.
The SEC's lawsuit, filed on February 15, said traders bought call options that climbed 1,700 percent after the formal announcement of the Heinz buyout.
Since filing suit, the SEC has received nearly 800 pages related to Alpine's Goldman account from the bank and delivered by the Swiss Financial Market Supervisory Authority, Alpine said.
The FBI had also said it was investigating the unusual trading activity, and Goldman Sachs had said it was cooperating with the SEC. Goldman, which did not immediately respond to a request for comment on Tuesday, has not been accused of wrongdoing.
A spokesman for the SEC declined comment.
The case is Securities and Exchange Commission v. Certain Unknown Traders in the Securities of H.J. Heinz Co, U.S. District Court, Southern District of New York, No. 13-01080.
(Reporting by Nate Raymond; Editing by Leslie Gevirtz)