Former Goldman Sachs employee in hot water with SEC
27 November 2015 Washington DC
Image: Shutterstock
A former Goldman Sachs employee hired to develop software for preventing misconduct has been charged by the US Securities Exchange Commission (SEC) with using his knowledge to conduct insider trading, allegedly making $450,000 in illicit profits.
Yue Han is accused of using information in confidential emails between Goldman Sachs investment bankers to gain information on firms that were on the verge of being acquired, and to purchase securities of these companies
He was an associate of the bank’s compliance department at the time of the alleged offence, where he had access to merger and acquisition information before it was made public. He was working on developing software for monitoring employees for misconduct such as insider trading.
Han allegedly used this information to purchase securities in at least four companies that were shortly to be acquired; Yodlee Inc., Zulily Inc., Rentrak Corporation, and KLA-Tencor Corp.
Joseph Sansone, co-chief of the SEC Enforcement Division’s Market Abuse Unit, said: “We allege that Han’s employer gave him access to confidential information so that he could help the firm detect and deter illegal activity, but he betrayed that trust by using the information for his own profit.”
The case was brought to light by the SEC Market Abuse Unit’s Analysis and Detection Center, which uses data analysis tools to detect suspicious patterns such as improbably successful trading across securities over time.
Sansone added: “Fortunately the SEC staff’s probing analysis uncovered Han’s suspicious trading and enabled us to obtain an asset freeze before he could dissipate his ill-gotten gains.”
The SEC has now obtained an emergency court order to freeze Han’s assets and the accounts that he allegedly used to place the trades, one in his own name and one in his father’s.
Goldman Sachs commented: “If the allegations are true, Han violated our trust and ignored extensive training that he received so we are pleased that the authorities are pursuing action against him."
Yue Han is accused of using information in confidential emails between Goldman Sachs investment bankers to gain information on firms that were on the verge of being acquired, and to purchase securities of these companies
He was an associate of the bank’s compliance department at the time of the alleged offence, where he had access to merger and acquisition information before it was made public. He was working on developing software for monitoring employees for misconduct such as insider trading.
Han allegedly used this information to purchase securities in at least four companies that were shortly to be acquired; Yodlee Inc., Zulily Inc., Rentrak Corporation, and KLA-Tencor Corp.
Joseph Sansone, co-chief of the SEC Enforcement Division’s Market Abuse Unit, said: “We allege that Han’s employer gave him access to confidential information so that he could help the firm detect and deter illegal activity, but he betrayed that trust by using the information for his own profit.”
The case was brought to light by the SEC Market Abuse Unit’s Analysis and Detection Center, which uses data analysis tools to detect suspicious patterns such as improbably successful trading across securities over time.
Sansone added: “Fortunately the SEC staff’s probing analysis uncovered Han’s suspicious trading and enabled us to obtain an asset freeze before he could dissipate his ill-gotten gains.”
The SEC has now obtained an emergency court order to freeze Han’s assets and the accounts that he allegedly used to place the trades, one in his own name and one in his father’s.
Goldman Sachs commented: “If the allegations are true, Han violated our trust and ignored extensive training that he received so we are pleased that the authorities are pursuing action against him."
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