BOSTON (Reuters) - A research scientist at Massachusetts Institute of Technology was arrested on Wednesday on charges that he engaged in insider trading based on information he obtained from his wife, a corporate lawyer working on a deal involving a mining company.
Fei Yan, 31, was arrested in Massachusetts after federal prosecutors in Manhattan accused him of trading last year on inside information about South Africa's Sibanye Gold Ltd planned $2.2 billion acquisition of Stillwater Mining.
The U.S. Securities and Exchange Commission in a related lawsuit accused Yan of netting $120,000 by placing trades ahead of the Stillwater deal and another merger based on information he obtained from his wife, an associate at a corporate law firm....
...Yan, a citizen of China, had been employed as a post-doctoral associate in MIT's Research Laboratory of Electronics, according to Kimberly Allen, a spokeswoman for MIT. She referred further comments to the U.S. Attorney's Office in Manhattan.
He was charged in a criminal complaint with securities fraud and wire fraud. Following a hearing in federal court in Boston, Yan was released on a $500,000 unsecured bond....You know, I knew a couple of folks who traded equities in graduate school, but, for the most part, no one in graduate school has any information that is really worth trading on. It's not like your latest NMR result is going to affect the value of any corporation by any significant amount (in school, anyway.)
(A small side debate: on Twitter, a respected follower (and longtime reader of the blog) and I were pondering whether or not it was more likely that wealthy people or non-wealthy people were most likely to be caught, prosecuted or convicted by federal authorities for insider trading. I feel like it's more likely that the small fry are the ones who are caught, but my interlocutor felt that it was the wealthy folks who attracted more prosecutorial attention. Readers, what say you? Are there any relevant studies on this issue?)