Jauyo Lee, a former investment banker with Leerink Swann LLC, pleaded guilty to providing inside information about impending mergers involving clients to a college friend who traded on the tips, the U.S. said.
Lee and Victor Chen, the friend, pleaded guilty today to one count each of conspiracy to commit securities fraud and securities fraud in federal court in San Francisco, U.S. Attorney Melinda Haag said in an e-mailed statement.
Lee, 29, of New York, also known as Jason Lee, worked in the San Francisco office of Leerink Swann and gave nonpublic information to Chen about the 2009 merger of Syneron Medical Ltd. (ELOS) and Candela Corp. and the 2010 combination of Somanetics Corp. and a Covidien Plc (COV) unit, Haag said.
Chen, 29, of Sunnyvale, California, made more than $600,000 in profits by buying shares based on the tips and selling them when the mergers were announced, Haag said.
Christopher Cooke, an attorney for Lee, and Ted Cassman, an attorney for Chen, and didn’t immediately return e-mails seeking comment on the pleas.
Sentencing is scheduled for July 23. The maximum penalty for securities fraud is 20 years in prison.
The case is U.S. v Lee, 3:13-cr-00180, U.S. District Court, Northern District of California (San Francisco)
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