SEC charges Chinese investor with insider trading: $29M in ill-gotten gains

SEC charges Chinese investor with insider trading. SEC complaint alleges the accounts gained illicit profits from another trading in other companies.

13 February, AtoZForex The Securities and Exchange Commission (SEC) has just informed the public it has obtained court order to freeze the broker accounts of DreamWorks Animation SKG, Inc. by Comcast Corp. The accounts are holding more than $29 million in illicit profits from insider trading in advance of the April 2016, according to the regulator.

SEC charges Chinese investor with insider trading

Moreover, the SEC believes that in the weeks leading to the news of the acquisition, Shaohua (Michael) Yin collected more than $56 million of DreamWorks stock in the US brokerage accounts of five Chinese individuals. This included his elderly parents. When the acquisition was announced, the stock price of DreamWorks gained 47.3%.

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In the complaint, the SEC alleged the five accounts obtained $29 million from the DreamWorks trades. Moreover, the SEC complaint also alleges the accounts gained illicit profits from another suspicious trading in other companies.

Mr. Yin, a partner Summitview Capital Management Ltd. allegedly did not trade in DreamWorks stocks via his own account. However, he traded via five accounts from addresses in Beijing and Palo Alto and on the computer that accessed Yin’s email accounts.

What now for Mr. Yin?

Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office:

“Despite the defendant’s alleged attempts to hide his control over these accounts, the SEC’s data analytic investigative tools enabled us to determine who was behind the suspicious trading. Our action today shows that the SEC will not hesitate to freeze the assets of foreign traders when they use our markets to conduct illegal activity.”

On the 10th February, Judge J. Paul Oetken of the US District Court for the Southern District of New York approved SEC’s request for an asset freeze of the five brokerage accounts. Moreover, he issued an order to present why an injunction and other relief should not be issued. The hearing will take place on the 17th of February.

SEC’s complaint charges Michael Yin with securities fraud. Additionally, it mentioned the names of the holders of the five brokerage accounts as relief defendants. These are Lizhao Su, Zhiqing Yin, Jun Qin, Yan Zhou and Bei Xie. The regulator seeks a permanent ban, return of allegedly illicit profits, the civil monetary penalties, and other relief.

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