Timber Hill, a Connecticut-based trading firm, has filed an insider trading lawsuit against private-equity shareholder 3G Capital. The suit accuses the firm of selling Kraft Heinz stock before the company disclosed plans for a $15.4 billion write-down and SEC investigation. 3G Capital reportedly made $1.2 billion when it sold millions of shares months before those events were disclosed.
The suit states that the investment firm used non-public knowledge about Kraft Heinz’s operations, accounting and business prospects to unload the stock at "inflated prices." The lawsuit names six current or former Kraft Heinz executives and board members in addition to the two companies and outgoing CEO Bernardo Hees, who will be replaced after June 30 by AB InBev's Miguel Patricio.
On February 21, Kraft Heinz announced it would take a $15.4 billion goodwill impairment related to its Kraft and Oscar Mayer brands. It also announced it had received a subpoena because the Securities & Exchange Commission was investigating its accounting, and that it would cut its quarterly dividend from about 63 centers per share to 40 cents.