November 25, 2015 / 12:28 PM / 3 years ago

Ex-Goldman employee accused by U.S. regulator of insider trading

NEW YORK (Reuters) - A former Goldman Sachs Group Inc employee was accused by U.S. securities regulators on Tuesday of repeatedly engaging in insider trading based on information about deals involving the bank’s clients.

Yue Han, who worked in Goldman’s compliance division, reaped over $468,000 trading on inside information about four deals, the U.S. Securities and Exchange Commission said in a lawsuit filed in federal court in Manhattan.

Han, whose job involved building computer programs intended for identifying illegal behavior at Goldman including insider trading, traded on confidential information obtained through the bank’s information technology systems, the SEC said.

Those trades occurred from July to October, the SEC said, most recently enabling Han to earn $397,000 trading ahead of news last month that Goldman client Lam Research Corp had agreed to buy KLA-Tencor Corp in a $10.6 billion deal.

A day after that deal was announced and Han had liquidated KLA-Tencor call options he had bought beforehand, the Goldman employee left New York for China, where he is a citizen and is believed to be living, the SEC said.

“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 spokesman Michael DuVally said in a statement.

At the SEC’s request, U.S. District Judge Valerie Caproni on Tuesday entered an order freezing Han’s assets held at various brokerage firms.

In an email, Han called the SEC’s claims “not true” and said he would have a lawyer respond to the lawsuit.

According to the SEC, in his role developing a surveillance system to analyze Goldman’s communications that might raise compliance issues, Han had access to internal emails of employees who were working on mergers, the SEC said.

Han, who began working at Goldman as an associate in December 2014, traded on confidential information using at first his own brokerage account before arranging to have Wei Han, a presumed relative who did not respond to a request for comment, open one to which he had access, the SEC said.

Beyond the KLA-Tencor trades, Han also made trades ahead of announcements that Envestnet Inc would buy Yodlee Inc for $560 million; Liberty Interactive Corp’s $2.4 billion deal to buy Zulily Inc; and ComScore Inc’s $771 million acquisition of Rentrak Corp, the SEC said.

Yodlee, Zulily and Rentrak were clients of Goldman Sachs, the SEC said.

The case is Securities and Exchange Commission v. Han, U.S. District Court, Southern District of New York, No. 15-9260.

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