Former Goldman Employee Charged With Insider Trading Before Mergers
The Securities and Exchange Commission today announced insider trading charges against a former Goldman Sachs employee accused of stealing nonpublic information in the firm’s e-mail system so he could trade illegally in advance of client mergers and make more than $450,000 in illicit profits. The SEC has obtained an emergency court order to freeze the assets of the trader and accounts he used to place the illicit trades.
The SEC alleges that Yue Han, who worked as an associate in Goldman’s compliance department and also goes by the name John Han, traded on confidential information contained in e-mails sent and received by Goldman investment bankers responsible for advising clients on impending merger and acquisition transactions. Han gained access to investment banker e-mails as part of his work developing surveillance software designed to monitor other employees for potential misconduct such as insider trading.
The SEC’s case stems from its Market Abuse Unit’s Analysis...
SEC Charges Political Intelligence Firm
The Securities and Exchange Commission today announced that a political intelligence firm agreed to admit wrongdoing and pay a $375,000 penalty for compliance failures.
Marwood Group Research LLC also agreed to retain an independent compliance consultant after an SEC investigation found that the firm failed to properly inform compliance officers about instances when analysts obtained potential material nonpublic information from government employees. Under Marwood Group’s written policies and procedures, compliance officers are central to the firm’s efforts to prevent confidential or nonpublic information from being released to clients, who in turn could use it to influence their securities trading decisions.
"Government employees routinely possess and generate confidential market-moving information. When political intelligence firms like Marwood Group obtain information from government employees, they must take the necessary steps to prevent the dissemination of potentially material nonpublic information obtained in the course of their research,” said Andrew J. Ceresney, Director of the SEC’s Enforcement...
SEC: Stockbroker Stole Investor Money for Home Renovations
The Securities and Exchange Commission today announced fraud charges against a former stockbroker accused of stealing investor money to remodel his house and pay other bills.
The SEC alleges that Bernard M. Parker raised more than $1.2 million from his longstanding brokerage customers and others who were told they were purchasing legitimate real estate tax lien certificates and would earn returns of six to nine percent annually. However, Parker only used a small amount of investor funds to purchase tax liens and instead used their money to remodel his home in Indiana, Pa., make car payments, and pay bills for his father-in-law.
“We allege that while Parker was using investor funds for his personal expenses, he provided investors with computer printouts of vacant lots or homes and falsely told them that his company held liens on those properties,” said Sharon B. Binger, Director of the SEC’s Philadelphia Regional Office. “Once he gained...
Atlanta Businessman Charged in Nursing Home Investment Scheme
The Securities and Exchange Commission today announced fraud charges and an emergency asset freeze obtained against an Atlanta-based businessman accused of misusing investor funds raised to purchase and renovate senior living facilities.
The SEC alleges that Christopher F. Brogdon amassed nearly $190 million through dozens of municipal bond and private placement offerings in which investors supposedly earn interest from revenues generated by the nursing home, assisted living facility, or other retirement community project supported by their investment. But Brogdon secretly commingled investor funds instead of using the money to finance the project described to investors in the disclosure documents for each offering. From the commingled accounts, he has diverted investor money to other business ventures and personal expenses.
“As alleged, Brogdon deceived investors about the true nature of these investment opportunities,” said Sanjay Wadhwa, Senior Associate Director of the SEC’s New York Regional Office. “Brogdon falsely promised investors they were investing in...
Assets Frozen in Alleged Immigration Scam
The Securities and Exchange Commission today announced it has obtained a court order freezing the assets of a South Florida woman and her company accused of purchasing a boat and luxury cars with money she raised from investors seeking U.S. residency through the EB-5 Immigrant Investor Pilot Program.
Under the EB-5 program, foreign citizens may qualify for U.S. residency if they make a qualified investment of at least $500,000 in a specified project that creates or preserves at least 10 jobs for U.S. workers. The SEC alleges that Lin Zhong and her company EB5 Asset Manager LLC raised at least $8.5 million for use by U.S. EB-5 Investments LLC in job-creating real estate development projects, but they diverted nearly $1 million to purchase a boat, a BMW, and a Mercedes among other improper personal uses of investor funds.
“We allege that Zhong promised investors their money would be used to develop real...