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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 22834 / October 7, 2013

Securities and Exchange Commission v. Nguyen et al., Civil Action No. 12 Civ. 5009 (GBD) (S.D.N.Y.)

The SEC announced that on Friday, October 4, 2013 the Honorable George B. Daniels, United States District Judge, United States District Court for the Southern District of New York, entered Final Judgments on Consent against Tai Nguyen and ThanhHa Bao in SEC v. Nguyen et al., 12-Civ.-5009 (GBD) (S.D.N.Y.)., an insider trading case stemming from the SEC's ongoing investigation of so-called "expert networks."

The SEC's complaint alleges that from 2006 through 2009, Nguyen frequently traded in the securities of Abaxis, Inc. based on inside information that he received from his sister and co-defendant, Bao, who was then an employee at Abaxis. Nguyen repeatedly traded for himself in advance of the company's quarterly earnings announcements while in possession of key data disclosed in those announcements, reaping tens of thousands of dollars in illicit profits. In addition, Nguyen, the owner of California-based research firm Insight Research, passed that same information to hedge fund clients of his firm, who used the inside information to make millions of dollars in profits from trading Abaxis securities.

According to the SEC's complaint, Nguyen regularly obtained material nonpublic information about Abaxis's quarterly earnings - including revenues, gross profit margins and earnings per share - from Bao, who worked in Abaxis's finance department. Nguyen used the information to trade Abaxis securities in his own account and reaped $144,910 in illicit trading profits from 2006 through 2009.

The final judgment against Nguyen requires him to disgorge $144,910 in profits that he reaped from the alleged insider trading and to pay prejudgment interest of $23,887. (Nguyen's disgorgement and prejudgment interest obligations will be credited against the amount he is required to pay in the parallel criminal case against him, in which he was also sentenced to a year of incarceration.) Nguyen's settlement with the SEC also requires him to pay a penalty of $144,910 and permanently enjoins him from future violations of Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933.

The final judgment against Bao requires her to pay penalty of $144,910, bars her from serving as an officer or director of a public company for five years, and permanently enjoins her from future violations of the federal securities laws.

 

http://www.sec.gov/litigation/litreleases/2013/lr22834.htm


Modified: 10/07/2013