Former SodaStream CEO has been charged with insider trading

According to the indictment, employee Ayala Cohen purchased the company’s stock using the inside information provided to her by Daniel Birnbaum on two different occasions.

Daniel Birnbaum, CEO of SodaStream, speaks during a meeting with Ramon Laguarta, Elected Chief Executive Officer of PepsiCo, (not seen) in Tel Aviv, Israel, August 20, 2018 (photo credit: REUTERS)
Daniel Birnbaum, CEO of SodaStream, speaks during a meeting with Ramon Laguarta, Elected Chief Executive Officer of PepsiCo, (not seen) in Tel Aviv, Israel, August 20, 2018
(photo credit: REUTERS)

An indictment was filed on Tuesday against Daniel Birnbaum, former CEO of SodaStream International, and against employee Ayala Cohen, for using inside information and obstructing legal proceedings, Israeli media KAN News reported.

After 12 years as chief executive of the Israeli carbonated drink company, Birnbaum stepped down on September 1, 2019, when he was placed under investigation for insider trading violations surrounding the company’s acquisition by PepsiCo.

According to the indictment, Cohen purchased the company’s stock using the inside information provided to her by Birnbaum on two different occasions, as was initially reported by Globes.

The first of the two incidents occurred in February 2017, just before SodaStream released a financial report showing a 213% increase in net profit for the fourth quarter of 2016 over the same period the previous year.

Cohen was reportedly aware of the findings prior to their publication, and purchased SodaStream shares for NIS 150,000 two days before the results were revealed. She then sold the shares for a profit of NIS 28,000.

 Soda Stream bottle (credit: Wikimedia Commons) Soda Stream bottle (credit: Wikimedia Commons)

The second allegation occurred in July 2018, following a meeting between Birnbaum and the CEO and president of PepsiCo.

Birnbaum allegedly convinced Cohen to invest all of her savings in the company’s stock. Cohen purchased SodaStream shares worth NIS 200,000 from her current account and another NIS 100,000 from a savings account. Cohen then liquidated all her shares for a profit of NIS 156,000 shortly after SodaStream announced it had reached an acquisition deal with PepsiCo, one day after the financial report was published.

The Israel Securities Authority completed its investigation in July 2020 and, referred the case to the state attorney.