SEC Charges Chinese Citizens Who Reaped Massive Profits From Insider Trading on Comcast-Dreamworks A

Discussion in 'Wall St. News' started by dealmaker, Feb 10, 2017.

  1. dealmaker

    dealmaker

    Press Release
    [​IMG] [​IMG] [​IMG] [​IMG] [​IMG]

    SEC Charges Chinese Citizens Who Reaped Massive Profits From Insider Trading on Comcast-Dreamworks Acquisition
    Obtains Court Order Freezing More Than $29 Million in U.S. Accounts

    FOR IMMEDIATE RELEASE
    2017-44
    Washington D.C., Feb. 10, 2017
    The Securities and Exchange Commission today announced that it obtained an emergency court order freezing brokerage accounts holding more than $29 million in illegal profits from insider trading in advance of the April 2016 acquisition of DreamWorks Animation SKG, Inc. by Comcast Corp.

    The SEC alleges that in the weeks leading up to the news of the acquisition, Shaohua (Michael) Yin amassed more than $56 million of DreamWorks stock in the U.S. brokerage accounts of five Chinese nationals, including his elderly parents. DreamWorks stock price rose 47.3% once the acquisition was announced.

    In a complaint filed in U.S. District Court in the Southern District of New York, the SEC alleged the five accounts reaped $29 million from the DreamWorks trades. The complaint also alleges the accounts profited from other suspicious trading in another U.S.-based company and three China-based companies ahead of market-moving news.

    Yin, a partner at Summitview Capital Management Ltd., a Hong Kong-based private equity firm, allegedly did not trade in DreamWorks stock through his own account but instead traded through five accounts from addresses in Beijing and Palo Alto and on a computer that also accessed Yin’s email accounts.

    “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,” said Michele Wein Layne, Director of the SEC's Los Angeles Regional Office. “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 February 10, Judge J. Paul Oetken of the U.S. District Court for the Southern District of New York granted the SEC’s request for an asset freeze of the five brokerage accounts and issued an order to show cause why an injunction and other relief should not be issued. A hearing has been scheduled for February 17.

    The SEC’s complaint charges Michael Yin with securities fraud and names the holders of the five brokerage accounts – Lizhao Su, Zhiqing Yin, Jun Qin, Yan Zhou and Bei Xie – as relief defendants. The SEC is seeking a permanent injunction, return of allegedly ill-gotten profits, civil money penalties, and other relief.

    The SEC’s investigation has been conducted by Jasmine Starr, Sarah Mitchell, and Finola H. Manvelian of the Los Angeles Regional Office, with assistance from John Rymas of the Enforcement Division’s Market Abuse Unit. The SEC’s litigation will be led by Gary Leung and Amy Longo. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.
     
  2. dealmaker

    dealmaker

    He thought he can out smart the system which sometimes can happen but in his case, not!
     
  3. jj90

    jj90

    If they go to the Mainland, the SEC will likely never get them. The accounts maybe, but not the individuals.
     
  4. dealmaker

    dealmaker

    While that is true he'll have to find another job, he is done in investment management/ private equity...
     
  5. Overnight

    Overnight

    Fucking scumbags!
     
    traderob and dealmaker like this.
  6. This story kind of reminds me of the movie Hacker 2016,

    in the end...the bad guy in Hong Kong made a 32 million trade bet in Options which turned into 3.3 billion because of an incident he orchestrated. o_O:wtf:

    Not exactly 'insider trading' but kind of the same principle. Kind of the same or similar plot to Pelham 123 (2009) movie

    ...it starts at the 1:18:18 mark and ends at 1:24:12
     
    Last edited: Feb 10, 2017
  7. jj90

    jj90

    I would think someone who is orchestrating such a plan would have ample resources or been able to move some of those resources outside the reach of said authorities and have enought that they never have to work again.
     
  8. dealmaker

    dealmaker

    Agreed, however greedy guys like that can never have enough; thus I am sure he'll want to do something...
     
  9. Llxa

    Llxa

    Oh well he didn't hide it well enough. He thought trading through five accounts would be enough. Live and learn. Better luck next time!
     
  10. Sig

    Sig

    Probably the simultaneous and similar trading in 5 different accounts is what triggered the alert in the first place. He probably would have been better off using one. I am curious how the SEC manages to get warrants on these things, they appear to have obtained access to email accounts and IP address records, which would taint the whole case if they didn't have the right warrants. However it seems they would have needed that info to get probable cause in the first place.
     
    #10     Feb 11, 2017