Risk & Compliance

Goldman Employee Accused of Insider Trading

The employee's position in the firm's compliance department allegedly gave him access to confidential information in investment bankers' emails.
Matthew HellerNovember 30, 2015

The U.S. Securities and Exchange Commission has charged a former employee of Goldman Sachs with trading on inside information that he obtained through his work monitoring other employees for potential misconduct.

Yue Han, 34, was assigned to the surveillance analytics group within Goldman’s compliance department. According to the SEC, the position gave him access to confidential information contained in emails sent and received by Goldman investment bankers responsible for advising clients on impending merger and acquisition transactions.

By trading on that information, the SEC said in a civil complaint, Han was able to make more than $460,000 in illicit profits.

“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 G. Sansone, co-chief of the SEC Enforcement Division’s Market Abuse Unit, said in a news release.

The SEC said Han, a Chinese citizen, left New York for Shanghai in October, but it had obtained a freeze on his assets before he was able to “dissipate his ill-gotten gains.”

Han began working in the surveillance analytics group in December, the SEC said, and was tasked with “helping to develop surveillance analytics to assist Goldman Sachs in detecting improper conduct, including potential insider trading.”

Without notifying Goldman, Han allegedly opened brokerage accounts in his own name and the name of his father, Wei Han. Using his access to material nonpublic information about impending M&A deals involving Goldman, he traded in the securities of four firms — Yodlee Inc., Zulily Inc., Rentrak Corp., and KLA-Tencor Corp. — that were about to be acquired, the SEC said.

The bulk of Han’s illicit profits, according to the SEC, came from his purchase of KLA call options for about $31,600 between Oct. 13 and Oct. 20. After KLA’s acquisition by Lam Research was announced on Oct. 21, Yan allegedly sold the options for about $427,385.

The SEC also charged Wei Han as a relief defendant to recover illicit profits that Yue Han allegedly generated by trading in the account held in his father’s name.