REAL LIFE NEWS: HOW NOT TO COMMIT INSIDER TRADING FRAUD
by Hazed
A man from Cambridge, Massachusetts has been arrested and charged with insider trading, having allegedly used information from his wife’s law practice to make favourable stock trades. He netted more than $100,000 from this fraudulent activity.
Nothing unusual here, it’s quite a common crime in the financial world. But what makes this chap stand out is just how dumb he was about it, making no attempt to cover his tracks. He used his work computer at MIT to make multiple queries to search engines on “how sec detect unusual trade” and “insider trading with international account.” He visited multiple webpages about the subject, including one called “Want to commit insider trading? Here’s how not to do it.”
For the actual crime, Fei Yan set up an investment account in his mother’s name, then used information he got from conversations with his wife, who is an associate with a New York law firm, to buy stocks in companies that had pending acquisitions, before the details were made public. This allowed him to buy the stocks before the price rose when the news was announced.
He faced three charges of fraud, each of which carries maximum sentences of 20 to 25 years in jail.
What a pity that none of the web pages he consulted told him he should wipe his browser history!
Source: http://www.theregister.co.uk/2017/07/14/insider_trading_charges/
