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The Five Dumbest Things on Wall Street This Week: Feb. 22

2. Heinz Hustle

Remember that old Heinz (HNZ) commercial featuring the Carly Simon tune Anticipation?

Well, it looks like a group of greedy -- and stupid -- traders forgot the song's chorus. They simply couldn't wait for the ketchup maker to get taken out before buying in.

The FBI revealed Tuesday it was investigating possible insider trading in Heinz options prior to the company's $23.3 billion deal last week to be acquired by Warren Buffett's Berkshire Hathaway (BRK-B) and Brazil's 3G Capital. Last Friday, the SEC filed a suit against a gaggle of still-unnamed traders who allegedly used a Swiss Goldman Sachs (GS) account to get an illegal leg up on the competition.

"The FBI is aware of the trading anomalies the day before Heinz's announcement," a spokesman said. "The FBI is consulting with the SEC to determine if a crime was committed." A spokesman for Goldman said the investment bank is helping out with the investigation as well.

Check that out. Goldie is hanging with the good guys this time around. Maybe, to quote Casablanca, this will be the beginning of a beautiful friendship between the investment bank and regulators.

Maybe not. But we can always hope.

Anyway, the bandits did use Goldman's casino to allegedly gamble on 2,533 call options last Wednesday, according to the SEC. The anonymous investors spent nearly $90,000 on the bullish trade, a position that spiked to $1.8 million on paper after the deal was announced Thursday. Shares of the company popped 20% to $72.50 after the acquisition hit the tape Thursday.

"The timing, size and profitability of the defendants' trades, as well as the lack of prior history of significant trading in Heinz" makes the trades "highly suspicious," the SEC said in its complaint.

And oh-so-dumb. Seriously, these get-rich-quick schemers must have been really slow if they believed the authorities would not ketchup to them.

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