Insider Trading
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July 17, 2018
Rodolfo Sablon has pled guilty to insider trading charges in connection with a tender offer for his role in an insider trading scheme based on material, nonpublic information that Sablon received from a former employee at the bank. Sablon collected more than $2M in illicit investments based off of his scheme. USAO Southern District of New YorkJuly 10, 2018
Colorado man Frank Morelli was sentenced to seven years in prison for his role in a seven-person scheme to defraud the SEC and investors. With his co-conspirators, Morelli had manipulated the stock price of a company they controlled through false press releases, organized insider trading, and bribery. The fraud had generated several million dollars in profits before it was stopped. USAO EDPAJuly 6, 2018
A former hedge fund manager and a former stock trader were convicted of, among other charges, conspiracy to commit securities fraud in connection with a scheme that generated $30 million in ill-gotten profits. The defendants conspired with cybercriminals to obtain press releases prior to their release and then execute trades designed to profit off their advance knowledge of the financial information contained in the announcements. DOJ, DHS, the Secret Service, and the SEC worked together on the investigation and prosecution. USAO EDNYJune 28, 2018
The SEC charged a former Equifax manager with insider trading in advance of the company’s September 2017 announcement of a massive data breach that exposed Social Security numbers and other personal information of approximately 148 million U.S. customers. This is the second case the SEC has filed arising from the Equifax data breach. In March, the former chief information officer of Equifax’s U.S. business unit was charged with insider trading. SECJune 13, 2018
The founder and former CEO of Alliance Fiber Optic Products, Inc., Peter Chang, was sentenced to two years in prison following his guilty plea on charges of insider trading. Chang used brokerage accounts in his brother’s and his wife’s name to purchase and sell company stock at times when he was in possession of material nonpublic information about the company. ND CalMay 31, 2018
The SEC charged an employee of a prominent investment bank with repeatedly using his access to highly confidential information in order to place illicit and profitable trades in advance of deals on which the bank was providing investment banking advisory services. According to the SEC’s complaint, Woojae “Steve” Jung, a Vice President of Investment Banking who worked in the bank’s San Francisco and New York offices, used sensitive client information in order to trade in the securities of 12 different companies prior to the announcement of market-moving events. The SEC alleges that between 2015 and 2017, Jung used an account held in the name of a friend living in South Korea to place these illegal trades and generate profits of approximately $140,000. As alleged in the complaint, by using his friend’s brokerage account, Jung attempted to evade detection by skirting his employer’s requirements that he pre-clear his trades and that he use an approved brokerage firm that would have reported the trading to his employer. SECMay 8, 2018
The SEC announced the hedge fund advisory firm Visium Asset Management LP has agreed to settle charges related to asset mismarking and insider trading by its privately managed hedge funds and portfolio managers. Separately, the firm’s CFO agreed to settle charges that he failed to respond appropriately to red flags that should have alerted him to the asset mismarking. The SEC’s order finds that two portfolio managers of New York-based Visium falsely inflated the value of securities held by hedge funds it advised, causing the funds to falsely inflate returns, overstate their aggregate net asset value, and pay approximately $3.15 million in excess fees to Visium. The order also finds that certain Visium portfolio managers traded in the securities of pharmaceutical companies in advance of two generic drug approvals by the U.S. Food and Drug Administration (FDA). The trades were based on confidential information received from a former FDA official working as a paid consultant to Visium. Trades were also made in the securities of home healthcare providers in advance of a proposed cut to certain Medicare reimbursement rates by the Centers for Medicare and Medicaid Services (CMS), based on confidential information received from a former CMS employee working as a paid consultant to Visium. Visium agreed to settle the SEC’s charges by, among other things, disgorging illicit profits totaling more than $4.7 million plus interest of $720,711, and paying a penalty of more than $4.7 million. Ku agreed to pay a $100,000 penalty and to be suspended from the securities industry for twelve months. Visium and Ku each consented to the applicable SEC order without admitting or denying the findings. SECAmerican Success Story or an Illegal Tipster for Jury to Decide
Posted 04/11/18
By the C|C Whistleblower Lawyer Team
On Tuesday, attorneys delivered opening arguments in the trial of Benjamin Chow, a Chinese immigrant who has been charged with securities fraud in connection with Canyon Bridge Capital Partners’ failed $1.3 billion acquisition of Lattice Semiconductor Corp. Last year, the Trump Administration blocked the Chinese-backed private equity firm from buying the U.S.-based chipmaker,...