MIT scientist busted for insider trading after Googling about it

Researching crime doesn't pay for scientist accused of insider trading

"Here's How Not to Do It". Prosecutors say Yan searched "how sec detect unusual trade" before he bought numerous stocks and options that netted him around US$120,000 (S$166,000) in illicit profits. He turned his illegal profit by purchasing and selling options in Stillwater Mining Co. and Mattress Firm Holding Corp., according to complaints filed by the US Attorney's Office for the Southern District of NY and the Securities and Exchange Commission. After a federal court hearing in Boston, authorities released Yan on a $500,000 unsecured bond. He could not immediately be reached for comment. The London-based law firm announced it suspended Yan's wife, and will be cooperating with the SECs investigation.

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Yan first invested in Mattress Firm last June, three months after Wu was pl;aced on the team handling the negotiation of their then-potential merger with Steinhoff International Holdings NV. The trades related to the merger of two companies: Sibanye Gold Ltd. and Stillwater Mining.

Yun also made the choice to put these trades in a "newly-opened brokerage account" that was named after his mother Rongxia Wu, who lives in China.

On Dec. 8, the day before the Stillwater merger, the indictment alleges Yan bought 54 call options that would have allowed him to purchase the company's shares at $15 on January 20.

He also searched online for "stillwater merger" in early November, over a month before the announcement, and at one point read an article online entitled 'Want to Commit Insider Trading?

According to prosecutors [PDF] this week, the evidence against Yan includes multiple search engine queries made from his work PC on "how sec detect unusual trade" and "insider trading with worldwide account", as well as visits to multiple webpages on the subject, including one titled "Want to commit insider trading?" If convicted, he could face up to 25 years in prison and as much as $5 million in fines for the security fraud charges, and 20 years in prison and up to a $250,000 fine for the wire fraud charge.

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