Investment Banker in Insider Trading Scheme
According to the The Securities and Exchange Commission (“SEC”), Woojae “Steve” Jung, an investment banker at Goldman Sachs, used confidential client information to trade in the securities of 12 different companies prior to the announcement of market-changing events. He used his access to highly confidential information, to place illegitimate and highly profitable trades in advance of deal negotiations in which the bank was providing investment banking services. He placed illegal trades and generate profits of approximately $140,000.
On May 31, 2018, The SEC charged an employee of a well-known bank with frequently using his access to highly confidential information in order to place illegitimate and highly profitable trades in advance of deal negotiations in which the bank was providing investment banking services.
The SEC alleges, Woojae “Steve” Jung, a former Vice President of well- known establishment, Goldman Sachs, used confidential client information to trade in the securities of 12 different companies prior to the announcement of market-changing events. The SEC alleges that between February 2015 and July 2017, Jung used a personal account in the same name as a friend living in South Korea to place illegal trades and generate profits of approximately $140,000. As alleged in the SEC complaint, by using his friend’s brokerage account, Jung attempted to avoid detection by loosely following his employer’s requirements that he pre-clear his trades and that he use an approved brokerage firm that would have reported the trading to his employer.
“Jung tried to insulate himself by allegedly placing trades in the brokerage account of a friend who lived overseas. Like others before him, Jung’s alleged scheme failed when our data analysis uncovered the account’s suspicious trading pattern and, despite Jung’s attempts at evasion, traced the trading back to him.” said Joseph G. Sansone, Chief of the SEC’s Market Abuse Unit.
As a result, the SEC filed charges against Jung with fraud and seeks disgorgement of allegedly illegal monetary gains, pre-judgement interest, penalties, and injunctive relief. The complaint also names Jung’s friend, Sungrok Hwang, as a relief defendant to have him disgorge illicit gains that Jung generated by trading in his brokerage account. Similarly, the U.S. Attorney’s Office for the Southern District of New York filed unsealed criminal charges against Jung.
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