SEC's market abuse unit accuses scientist of insider trading

By Mark Iandolo | Jul 19, 2017

WASHINGTON (Legal Newsline) — The Securities and Exchange Commission announced July 12 that it has charged Fei Yan, a research scientist, with insider trading.

According to the SEC, Yan loaded up on stocks and options in advance of two corporate acquisitions made last year, using information about the acquisitions attained from his wife, an associate at the law firm handling the deals. Yan then allegedly attempted to evade detection by researching past SEC cases of insider trading. He purportedly made Google searches that included “how SEC detect unusual trade” and “insider trading in an international account” – the second of which led to Yan attempting to place the trades in a broker account bearing the name of his China-residing mother.

“As alleged in our complaint, Yan attempted to evade detection by researching prior SEC cases against insider traders and using a brokerage account in a different name, but we identified the profitable trades in deals advised by the same law firm and traced them back to him,” said Joseph G. Sansone, co-chief of the SEC Enforcement Division’s market abuse unit.

Joshua R. Geller, John Rymas, and Simona Suh of the market abuse unit are handling the matter, with Sansone supervising. The SEC noted its appreciation for the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority for their assistance in the case.

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