SEC Charges Chinese Company Executive with Insider Trading

ADMINISTRATIVE PROCEEDING
File No. 3-19778

April 30, 2020 - The Securities and Exchange Commission today announced settled insider trading charges against the Vice President of Corporate Development of Momo, Inc., for unlawfully trading Momo securities while he was aware of material, non-public information about an impending acquisition.

According to the SEC's order, Wei Duan, a Chinese citizen, learned about Momo's potential acquisition of Tantan Limited in early 2018 while working on Momo's acquisition team. The order finds that on February 10, 2018, while aware of non-public information about the planned acquisition, Duan sold short put options in a U.S. brokerage account. Momo publicly announced the Tantan acquisition before the markets opened in the United States on February 23, 2018. Following the announcement, the puts that Duan had sold expired "out of the money," and Duan realized illicit profits of $60,005.

The order finds that Duan violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the findings, Duan agreed to a cease-and-desist order and to pay disgorgement of $60,005, prejudgment interest of $6,548.27, and a civil money penalty of $60,005.

The SEC's investigation was conducted by Ruta Dudenas and Delia Helpingstine, and supervised by Amy S. Cotter, of the SEC's Chicago Regional Office. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.