Having avoiding the insider trading spotlight for years, this morning Goldman Sachs finally succumbed to the greatest of indignities, when one of its employee was busted with insider trading.
Woojae "Steve" Jung, 37, a Goldman TMT Vice President who is a Korean citizen and resides in San Francisco, was charged with securities fraud for using inside information about the investment bank’s clients to make $140,000 in illicit profits on 12 deals mostly involving Goldman tech company clients, while using a co-conspirator in South Korea to execute the trades.
Jung, who had worked at Goldman since 2012, was charged with one count of conspiracy and six counts of securities fraud, for running the scam from 2015 to 2017 according to the SEC lawsuit filed in Manhattan Southern today (case 18-cv-04811).
While Goldman Sachs wasn't identified by name in the complaint (where it is instead simply listed as the "Investment Bank") Jung’s LinkedIn page says he’s worked at the bank since 2012 after graduating from Wharton Business School.
According to the complaint, Jung traded in the securities of at least 12 publicly traded companies identified below "in advance of announcements of the involvement of these Companies in transactions advised by the Investment Bank. Those transactions primarily concerned actual or contemplated mergers, acquisitions, and tender offers." These included:
- CA, Inc.
- FEI Company
- Fairchild Semiconductor
- Foresight Energy
- Nimble Storage
- NXP Semi
- WR Grace
According to the SEC, Jung obtained access to material nonpublic information about impending business transactions involving companies advised by the Investment Bank through his direct involvement working on these transactions, through his access to the Investment Bank's files, or through contact with co-workers staffed on the transactions
Using this non-public info of upcoming deals and transactions, Jung traded in the respective entities, while attempting to conceal his connection to the trading by purchasing the securities in a brokerage account held in the name of a friend living in South Korea, Sungrok Hwang.
Over the course of the scheme, Jung generated illegal profits of more than $140,000. By engaging in this misconduct, Jung violated the antifraud provisions of the federal securities laws.
As the SEC further details, Jung joined Goldman in July 2012, at which time he held a trading account in his own name at Interactive Brokers but as mandated by the Personal Trading Policy, Jung began the process of closing his Interactive Brokers account in September 2012. Jung then opened a new brokerage account at Fidelity Brokerage Services which was an outside brokerage firm approved by Goldman. The Investment Bank directly received copies of Jung's Fidelity account statements, reflecting his trading in that account. However, on August 8, 2012, a second Interactive Brokers trading account was opened in the name of Jung's friend,...