Top tip for all you insider traders: Don't Google 'insider trading' from your work PC
Bloke accused of fraud may well be the Wolf of LOL Street
An MIT postdoctoral staffer was arrested and charged with insider trading after he allegedly searched online for tips on committing the crime.
Fei Yan, of Cambridge, Massachusetts, is accused of securities and wire fraud: he allegedly used information from his wife's law practice to make favorable stock trades that netted more than $100,000 in profit.
The US Attorney's office for Southern New York, and officials at America's financial watchdog the SEC, believe Yan set up an investment account in his mother's name then, based on conversations with his wife, who is an associate with a New York law firm, got insider information on pending acquisitions to purchase stocks and cash before the details were made public.
According to prosecutors [PDF] this week, the evidence against Yan includes multiple search engine queries made from his work PC on "how sec detect unusual trade" and "insider trading with international account," as well as visits to multiple webpages on the subject, including one titled "Want to commit insider trading? Here's how not to do it."
Unfortunately, none of those guides mentioned that you should probably not Google the crime you want to commit from your employer's network. He will now, if convicted, perhaps become an example for the next would-be insider trader looking for what not to do.
"Armed with confidential information about a corporate acquisition his spouse was working on, Yan allegedly traded on that information over and over again during a three-week period," said US attorney Joon Kim.
"As alleged, some of these trades followed online research Yan conducted on how to avoid law enforcement detection, including an article entitled 'Want to Commit Insider Trading? Here's How Not to Do It.' The answer to Yan's online inquiry should have been clear – there is no proper way to commit insider trading."
He now faces three fraud charges: two for securities fraud and one for wire fraud. These each carry maximum sentences of 20 to 25 years in prison, and could add up to $5.5m in fines.
Yan's wife, who was not named, is not listed as a defendant on the complaint. ®
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