U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23445 / January 14, 2016
Securities and Exchange Commission v. Bonan Huang, et al., Civil Action No. 2:15-cv-00269 (E.D. Pa.)
SEC Obtains Jury Verdict in Its Favor Against Former Capital One Employee On Insider Trading Charges
The Securities and Exchange Commission has obtained a jury verdict in its favor in a federal district court trial in Philadelphia against Mr. Nan Huang, who the agency charged with insider trading on information he illegally obtained from his employer Capital One Financial Corporation.
In its complaint filed in the federal court in the Eastern District of Pennsylvania on January 21, 2015, the SEC alleged that Huang worked for Capital One, a large credit card issuer, as a data analyst in the fraud department. While employed there, Huang and another individual searched their employer's nonpublic database that recorded the credit card activity for millions of customers at numerous, predominantly consumer retail corporations. Huang conducted hundreds, if not thousands, of keyword searches of this database. These searches, which were not done in furtherance of their employment duties, allowed Huang to view and analyze aggregated sales data for the companies he searched. The complaint further alleged that, in a breach of his duty to his employer, Huang made profitable securities transactions on the basis of this material, non-public information in advance of the public release of quarterly sales announcements by these companies.
At the conclusion of trial, the jury returned a verdict for the Commission and against Nan Huang finding that, through this conduct, Huang violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC is seeking a final judgment that: (i) permanently enjoins Huang from engaging in future violations of the above-cited provisions; (ii) orders Huang to disgorge his ill-gotten gains, with interest; and (iii) orders him to pay financial penalties.
The other Defendant charged in this matter, Bonan Huang, settled with the Commission on December 3, 2015.
The trial team from the Commission's Philadelphia Regional Office consisted of trial attorneys David L. Axelrod and Christopher R. Kelly, and trial paralegal Nichelle Pridgen.