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Ex-Goldman Sachs employee charged with insider trading

Kevin McCoy
USA TODAY

A former Goldman Sachs (GS) employee stole confidential information from the Wall Street powerhouse's email system and used it to generate more than $460,000 in illicit insider-trading profits, the Securities and Exchange Commission said Wednesday.

File photo taken in 2015 shows investment banking giant Goldman Sachs' New York City headquarters in Manhattan.

Yue Han, 30, who also uses the name John Hahn, started work at Goldman Sachs in late 2014 in a group assigned to improve the company's ability to identify insider-trading and other misconduct by conducting surveillance of employee emails, the SEC said.

Instead, Han allegedly used his access to emails of Goldman investment banking employees to review and trade on secret information about pending mergers and acquisitions in which his employer represented one of the firms involved.

"We allege that Han's employer gave him access to confidential information so that he could help the firm detect and deter illegal activity, but he betrayed that trust by using the information for his own profit," Joseph Sansone, co-chief of the SEC's Market Abuse Unit, said in a statement announcing the allegations.

The SEC obtained a court order that froze Han's assets and blocked him from using or transferring the alleged ill-gotten gains, said Sansone.

"If the allegations are true, Han violated our trust and ignored extensive training that he received so we are pleased that the authorities are pursuing action against him," Goldman said in a statement.

Han could not be reached for comment. The SEC said he left New York City on Oct. 22 for Shanghai, China, where he is believed to reside.

According to the SEC's federal court complaint filed in New York, Han violated Goldman's personal trading policies by opening a trading account at another financial company and failing to disclose it to his superiors. He also opened a similarly undisclosed account in the name of Wei Han, a relative, the complaint charged.

Using those trading accounts, Han allegedly bought "out of the money" call options — a financial bet that stock prices would increase — for at least four companies that were on the verge of being acquired. The companies included Yodlee, a software technology firm in California; Zulily, a Seattle-based online retailer; Rentrak, a media-research company in Portland; and KLA-Tencor, a semiconductor equipment manufacturer in California.

"Han reaped over $460,000 in illicit profits from these trades," the SEC complaint charged.

The complaint seeks a court order requiring Han to disgorge, with prejudgment interest, all illicit trading profits of other ill-gotten gains from trades made in the undisclosed accounts.

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