SEC Wins Insider Trading Case Against Capital One Employee

The Securities and Exchange Commission (SEC) obtained a jury verdict in its favor in a federal district court trial in Philadelphia against Nan Huang, who the agency charged with insider trading on information he illegally obtained from his employer Capital One Financial Corporation.

In its complaint filed in Pennsylvania on January 21, 2015, the SEC alleged that Huang worked for Capital One, a large credit card issuer, as a data analyst in the fraud department. While employed there, Huang and another individual searched their employer’s nonpublic database that recorded the credit card activity for millions of customers at numerous, predominantly consumer retail corporations. Huang conducted hundreds, if not thousands, of keyword searches of this database. These searches, which were not done in furtherance of their employment duties, allowed Huang to view and analyze aggregated sales data for the companies he searched. The complaint further alleged that, in a breach of his duty to his employer, Huang made profitable securities transactions on the basis of this material, non-public information in advance of the public release of quarterly sales announcements by these companies.

At the conclusion of trial, the jury returned a verdict for the SEC and against Nan Huang finding that, through this conduct, Huang violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC is seeking a final judgment that: (i) permanently enjoins Huang from engaging in future violations of the above-cited provisions; (ii) orders Huang to disgorge his ill-gotten gains, with interest; and (iii) orders him to pay financial penalties.

The other Defendant charged in this matter, Bonan Huang, settled with the SEC on December 3, 2015.

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com.   This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship.  Please note that the prior results discussed herein do not guarantee similar outcomes.

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Brenda Hamilton, Securities Attorney
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