U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23216 / March 10, 2015
Securities and Exchange Commission v. Bonan Huang and Nan Huang, Civil Action No. 2:15-cv-00269 (E.D. Pa. January 21, 2015)
SEC Obtains a Preliminary Injunction Against Two Former Employees of Capital One Financial Corporation for Insider Trading
The Securities and Exchange Commission ("SEC") announced today that, on March 2, 2015, the federal district court in Philadelphia, Pennsylvania entered a preliminary injunction against Bonan Huang and Nan Huang (the "Defendants") as part of the continuing litigation in this matter. The Defendants consented to the entry of this order, which essentially extended the terms of a temporary restraining order that the court entered on January 21, 2015. These orders freeze some of the Defendants' assets to ensure that the funds, which the Defendants obtained through their alleged illegal insider trading, are available to pay for any final judgment that may ultimately be imposed in this matter.
In its complaint filed on January 21, 2015, the SEC alleged that the Defendants, over the span of several years, operated a fraudulent and a highly profitable insider trading scheme based on information that they misappropriated from their employer, Capital One Financial Corporation ("Capital One"). The Defendants worked as data analysts for Capital One, which is one of the largest credit card issuers in the United States. Given their positions within the company, they had access to databases, which contained confidential information about the credit card activity of millions of Capital One's customers. The Defendants, by conducting targeted searches of these databases, were able to aggregate the credit card purchases made by Capital One's customers at over 170 merchants. Armed with the additional insights gained by analyzing this data, the Defendants traded options on the stock of these merchants ahead of corporate sales and earning announcements. The Defendants allegedly made thousands of such trades, which ultimately netted them over $2.8 million in illicit profits.
The SEC's litigation is being conducted by G. Jeffrey Boujoukos, David L. Axelrod, Christopher R. Kelly, Michael B. Novakovic, Patricia A. Kuzma Trujillo, and Daniel L. Koster of the SEC's Philadelphia Regional Office.
For further information, see Litigation Release No. 23179 (January 22, 2015).