Due to a leak of information the SEC accused a Chinese investor of being guilty of insider trading. The trader earned $29m exploiting non-public data. Last year Comcast, an American global telecommunications conglomerate and the largest broadcasting and cable television company in the world by revenue, secretly conducted a plan for the potential acquisition of DreamWorks Animation. Meanwhile five Chinese investors started to buy a vast amount of shares of the storytelling company. The SEC verified that the five investors, over a period of three-weeks, ending on April 25, took control on more than 2.1m DreamWorks shares. This enormous investment became really profitable as soon as news of Comcast’s $3.8bn purchase of DreamWorks went public. More precisely the five investors earned $29m in quick profits.
The SEC strongly believes that the trades were controlled by Shaohua Yin, a managing director at Hong Kong-based Summitview Capital Management. “The precision with which these trades were timed, combined with the sheer scale in which they occurred, could not be the product of chance,” the commission said in a civil complaint filed in federal court in Manhattan. “ . . . They proved to be massively profitable.” The complaint charges Mr. Yin, a 2005 graduate of the Wharton School of Finance, with securities fraud and names as relief defendants (relief defendant is a person named in civil litigation who is not accused of wrongdoing. However, it is alleged that the relief defendant has received property originally obtained illegally, and to which the relief defendant has no legitimate claim): Lizhao Su, 78, Mr. Yin’s mother; Zhiqing Yin, 79, the defendant’s father; Jun Qin, 45, a quality manager at Legrand Electrical Co in Beijing; Yan Zhou, 33, a Beijing schoolteacher; and Bei Xie, 29, an employee of PetroChina Coalbed Methane Co.
On February 3, Mr. Yin had to deliver his phone to FBI agents in order to find evidence of insider trading. The investor and the other named in the court tried to withdraw more than $22m from the accounts; however, on Friday, the SEC obtained a court order to freeze $29m in the accounts. The SEC has also a hypothesis on other possible Mr. Yin’s profits due to insider trading involving Lattice Semiconductor Corp, and three Chinese companies, 58.com, Ctrip.com and Giant Interactive Group. “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, which led the probe. The SEC is looking for a permanent injunction against Mr. Yin together with the withdrawal of his gains due to insider trading. Furthermore, it wants the relief defendants to give up their profits and interest involved in the illegal transaction.
Mattia Degiovanni
The SEC strongly believes that the trades were controlled by Shaohua Yin, a managing director at Hong Kong-based Summitview Capital Management. “The precision with which these trades were timed, combined with the sheer scale in which they occurred, could not be the product of chance,” the commission said in a civil complaint filed in federal court in Manhattan. “ . . . They proved to be massively profitable.” The complaint charges Mr. Yin, a 2005 graduate of the Wharton School of Finance, with securities fraud and names as relief defendants (relief defendant is a person named in civil litigation who is not accused of wrongdoing. However, it is alleged that the relief defendant has received property originally obtained illegally, and to which the relief defendant has no legitimate claim): Lizhao Su, 78, Mr. Yin’s mother; Zhiqing Yin, 79, the defendant’s father; Jun Qin, 45, a quality manager at Legrand Electrical Co in Beijing; Yan Zhou, 33, a Beijing schoolteacher; and Bei Xie, 29, an employee of PetroChina Coalbed Methane Co.
On February 3, Mr. Yin had to deliver his phone to FBI agents in order to find evidence of insider trading. The investor and the other named in the court tried to withdraw more than $22m from the accounts; however, on Friday, the SEC obtained a court order to freeze $29m in the accounts. The SEC has also a hypothesis on other possible Mr. Yin’s profits due to insider trading involving Lattice Semiconductor Corp, and three Chinese companies, 58.com, Ctrip.com and Giant Interactive Group. “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, which led the probe. The SEC is looking for a permanent injunction against Mr. Yin together with the withdrawal of his gains due to insider trading. Furthermore, it wants the relief defendants to give up their profits and interest involved in the illegal transaction.
Mattia Degiovanni