U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23769 / March 6, 2017
Securities and Exchange Commission v. Yu-Cheng Lin, No. 2:17-cv-000875 (D.N.J. filed February 9, 2017)
SEC Obtains Preliminary Injunction Against Former Ubiquiti Employee Charged With Insider Trading
On February 24, 2017, a federal court in Newark, New Jersey granted the SEC's motion for a preliminary injunction against Yu-Cheng Lin, continuing an asset freeze that the court had previously imposed and repeating its order that Lin repatriate money obtained directly or indirectly from the illegal trading and deposit that money into the registry of the court.
The SEC's complaint and emergency application, filed on February 9, 2017, allege that Lin, also known as Believe Lin, serially traded on material inside information ahead of earning announcements in 2016 by Ubiquiti Networks Inc., a California-headquartered company where Lin had worked from approximately March 2011 until June 2015. The complaint alleges that Lin traded in advance of Ubiquiti's quarterly earnings announcements on May 5, August 4 and November 3, 2016. It alleges that Lin did so by purchasing Ubiquiti common stock, call options and contracts-for-difference (CFDs) in brokerage accounts in the United States and overseas. It alleges that Lin's net profit from those three dates were approximately $1,656,353.
The court had previously issued a February 9, 2017 temporary restraining order that included the asset freeze, repatriation order, and other equitable relief.
The SEC's complaint charges Lin with violating antifraud provisions of the federal securities laws, including Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and seeks permanent injunctions, disgorgement of ill-gotten gains together with prejudgment interest, and civil monetary penalties.
The SEC's investigation is being conducted by Daniel Koster and Brent Mitchell in the Complex Financial Instruments Unit. The case is being supervised by the unit's deputy chief Reid Muoio. The litigation is being led by A. Kristina Littman and Stephan Schlegelmilch and supported by Corinthian Davis.