WASHINGTON (Legal Newsline) — The Securities and Exchange Commission (SEC) announced Sept. 20 that it has charged Peter C. Cheng, the former CEO of Alliance Fiber Optic Products, with allegations of insider trading in company stock.

According to the SEC, Chang generated more than $2 million in illicit profits. He purportedly used a secret brokerage accounts; these accounts were held in the names of his brother and his wife. The SEC alleges he used nonpublic information to tip his brother off ahead of major merger deals.

The SEC seeks disgorgement, a penalty, and permanent injunction for violating sections 10(b), 14(e), and 16(a) of the Securities Exchange Act of 1934 and rules 10b-5, 14e-3, and 16a-3.

“As alleged in our complaint, Chang betrayed his company and its shareholders for his personal gain by trading in clandestine accounts right after learning extremely confidential information in board meetings,” said Jina L. Choi, director of the SEC’s San Francisco Regional Office.

Serafima Krikunova looked into the case under the supervision of Jennifer J. Lee of the San Francisco office. John Rymas of the Enforcement Division’s market abuse unit also assisted. As the case moves forward, Susan F. LaMarca will handle the case.

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