Rarely does an insider trading suspect search on the web how to avoid being detected by the Securities and Exchange Commission, but this MIT scientist just did and he was arrested.
Massachusetts Institute of Technology research associate Fei Yan was arrested by the FBI on charges of insider trading. Law enforcement officers said the scientist googled “how sec detect unusual trade” before he purchased a large package of shares and options that brought him $120,000 in unlawful profit.
The feds also found that the researcher searched online for tips on insider trading on international accounts. SEC investigators found that Yan netted the profits after receiving insider tips from his wife who works at the London-based law firm Linklaters.
Yan’s wife was suspended for as long as authorities need her for the investigation into her husband. The man purchased stock from Stillwater Mining and Mattress Firm, two companies his wife’s employer was assisting with acquisition deals. When the acquisitions were disclosed to the public, the scientist sold the holdings. His wife is not charged with anything.
Researcher Used Brokerage Account Under a Different Name
Investigators found that the MIT researcher hid the transactions by conducting them from a brokerage account under his mom’s name. SEC Enforcement Division’s Market Abuse unit noted that the Chinese national researched past SEC cases involving inside trading and found that it was safer to use an account under a different name.
SEC investigators tracked Yan when they analyzed the trades in deals in his wife’s employer’s portfolio. MIT confirmed the man was a post-doctoral associate at the institute’s Research Laboratory of Electronics.
Yan was taken into custody in Massachusetts and now faces wire and securities fraud charges. He was released by a Boston court on a $500,000 bond.
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