SEC Charges Investment Bank Analyst And Friend With Insider Trading

SEC v. v. Jauyo (“Jason”) Lee and Victor Chen, Case No. C12-5031-JSC (N.D. Cal.).  On September 27, 2012, the SEC announced insider trading charges against Jauyo “Jason” Lee and his friend Victor Chen.  Lee routinely received sensitive information as an investment banker which he passed on to Chen.  For example, Lee tipped Chen about two upcoming corporate takeovers, and Chen traded on that information, leading to more than $600,000 in illegal profits.  Bank records showed a pattern of significant cash withdrawals by Lee followed by large cash deposits by Chen.  Lee and Chen communicated repeatedly by phone and by text messages in the weeks before the public announcement of the two mergers.  Chen then traded based on the material, non-public information that Lee had provided.  Chen spread his illicit trades across seven accounts at four brokerage firms.  They are charged with violating Sections 10(b) and 14(e) if the Exchange Act and Rule 10b-5 and 14e-13 thereunder.  The SEC seeks injunctive relief, civil monetary penalties and disgorgement.

This entry was posted in Securities and tagged , , . Bookmark the permalink.