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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23748 / February 13, 2017

SEC v. Yu-Cheng Lin (a.k.a. Believe Lin), No. 17 Civ. 875 (D.N.J. filed Feb. 9, 2017)

SEC Obtains Asset Freeze in Insider Trading Cases Involving Contracts-For-Difference

The Securities and Exchange Commission today announced an asset freeze it has obtained against a former employee of a California-based technology company who allegedly obtained approximately $1.6 million in illicit profits through illegal insider trading in the company's stock.

In an emergency action filed under seal in federal court in New Jersey on February 9, 2017, the SEC alleges that Yu-Cheng Lin (a.k.a. Believe Lin), a former employee of Ubiquiti Networks Inc., a publicly-traded technology company headquartered in San Jose, California, engaged in illegal insider trading in Ubiquiti contracts-for-difference (CFDs) and other securities. The SEC's complaint alleges that on May 5, August 4 and November 3, 2016, after Lin left the company, he traded in advance of Ubiquiti earnings announcements by purchasing Ubiquiti common stock, call options and CFDs in brokerage accounts located both in the United States and overseas. In each instance, the alleged trading pattern was essentially the same: Lin took a leveraged long position shortly before Ubiquiti's quarterly earnings announcements and then closed out those positions at a profit shortly thereafter. Through this trading activity, Lin allegedly obtained illegal profits of approximately $1.6 million. The SEC further alleges that Lin began acquiring a leveraged long position in advance of the company's earnings announcement on February 9, 2017.

Lin currently works and resides in Taiwan.

On February 9, 2017, the U.S. District Court for the District of New Jersey entered a temporary restraining order freezing Lin's assets, imposing an expedited discovery schedule and prohibiting the destruction of relevant documents. On February 10, 2017, the court entered an order that unsealed the SEC's complaint.

The SEC's complaint charges Lin with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctions, disgorgement of ill-gotten gains together with prejudgment interest, and civil monetary penalties.

SEC Complaint

Temporary Restraining Order

 

https://www.sec.gov/litigation/litreleases/2017/lr23748.htm


Modified: 02/14/2017