(Reuters) - A former senior executive at a Silicon Valley company now owned by Corning Inc agreed to pay $415,468, including a fine, to settle U.S. Securities and Exchange Commission charges of “serial” insider trading, the regulator said on Tuesday.
Yao Li, a former vice president of technology at Sunnyvale, California-based Alliance Fiber Optic Products Inc (AFOP), was accused of reaping illegal gains after learning from colleagues that the company would likely report disappointing revenue for three different quarters in 2014 and 2015.
The SEC said Li, 59, of Newark, California, used the inside information to sell AFOP stock he owned and sell borrowed shares short, betting on a decline, despite a company policy banning short sales.
Without admitting wrongdoing, Li agreed to pay a $196,203 fine, give up $196,203 of illegal gains and pay $23,062 of interest. He also accepted a five-year ban on being an officer or director of a public company.
Li’s lawyer did not immediately respond to requests for comment.
Corning, which is based in Corning, New York, said Li’s actions “in no way” related to its June 2016 takeover of AFOP, which valued that company at about $305 million.
The SEC said its case stemmed from its market abuse unit’s analysis and detection center, which tried to spot suspicious trading patterns such as “improbably successful trading” prior to earnings announcements over time.
On June 13, AFOP’s founder and former chief executive, Peter Chang, was sentenced to two years in prison after pleading guilty to insider trading ahead of the Corning takeover and two of the revenue shortfalls.
Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis