Because of suspected insider trading in the Comcast acquisition of DreamWorks Animation in April 2016, the U.S. Securities and Exchange Commission got an emergency court order on Friday to freeze five brokerage accounts. The accounts contain more than $29 million of profits allegedly gained from insider trading.
Forbes reported the account belongs to Michael Yin, partner at Summitview Capital Management in Hong Kong. He allegedly purchased over $56 million of DreamWorks shares several weeks before Comcast bought the animation company. The stocks were distributed in brokerage accounts in the U.S. of five Chinese nationals, including Yin’s elderly parents.
Timeline of Shares Selling
After the buy-in of Comcast was announced, share prices of DreamWorks jumped 47 percent. Yin sold the shares between April 26 when the takeover by Comcast of DreamWorks was first reported and April 28 when the purchase was formally announced, Bloomberg reported.
The five accounts gained $29 million from the rise in stock value, the SEC claimed in its complaint filed in the U.S. District Court in New York. Besides the insider trading accusation over the Comcast-DreamWorks sale, the account is also being charged with profiting from suspicious trading in another company based in the U.S. and three other firms in China prior to news that moved the market.
5 Relief Defendants
Yin is facing securities fraud charges and the five brokerage accounts are relief defendants. The accounts belong to Lizhao Su, Zhiqing Yin, Jun Qin, Yan Zhou and Bei Xie. SEC wants the injunction to become permanent, the ill-gotten profits returned and civil money penalties slapped on the five brokerage accounts.
The Hong Kong partner allegedly tried but failed to hide that he controls the five brokerage accounts. “Our action today shows that the SEC will not hesitate to freeze the assets of foreign traders when they use our markets to conduct illegal activity,” Michele Wein Layn, SEC Los Angeles Regional Office director, said.