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Insider Trader Arrested After He Googled 'Insider Trading,' Authorities Allege

Posted by BeauHD on from the breadcrumb-trail dept.

Spy Handler writes: Fei Yan, a research scientist at the Massachusetts Institute of Technology and 31-year-old Chinese citizen, was arrested by federal authorities on Wednesday on insider trading charges. Mr. Yan used Google to search for phrases such as "how sec detect unusual trade" and "insider trading with international account." He also allegedly read an article titled "Want to Commit Insider Trading? Here's How Not to Do It," according to the U.S. attorney prosecuting the case. Further reading: Associated Press, CNBC, USA Today

5 of 124 comments (clear)

  1. Re:So... he was charged with reading? by Cyberglich · · Score: 4, Informative

    RTFA he made bank on 2 mergers last year that is wifes firm was involved in . Thats sketchy as hell. Add the searches to that and you have probable cause to do some major digging.

  2. Re:So... he was charged with reading? by Anonymous Coward · · Score: 5, Informative

    He did trades on two different companies that were acquired. And presumably that's the only trades that account has done. And both were immediately very profitable. These are then flag as suspicious by SEC data analysis.
    The only connection they can find between the two is that the same law firm handled the acquisitions. They then find that the account is owned by a family member of someone at the law firm. They now have probably cause to issue warrants and get the search results?
    Ie. the search results are what are flagged him, not his wife, but the fact that insider trading was going on was discovered long before the search results.
    My impression of how it went anyway.

  3. Re:So... he was charged with reading? by will_die · · Score: 5, Informative

    Data analysis came up that investments made by some lady who lives in China were weird. Checking the phone calls to the brokerage company found they were coming from his phone. From there they found them being mother and son and then he was married to a lawyer involved in the legal work. Then they subpoenaed his searches from yahoo and google.

  4. Title is misleading. by Gravis+Zero · · Score: 4, Informative

    After flagging the trades as suspicious through data analysis, the SEC traced them back to Yan.

    The SEC was already on his trail by the time they found out about his search history.

    --
    Anons need not reply. Questions end with a question mark.
  5. Re:Yeah by Dwedit · · Score: 4, Informative

    http://dilbert.com/strip/2011-...