Ex-Goldman Bond Trader Chin Barred From Industry by SECBy and
Edwin Chin agreed to pay $400,000 to settle SEC allegations
RMBS trader concealed prices, then sold higher, SEC says
Edwin Chin, a former Goldman Sachs Group Inc. trader in residential mortgage-backed bonds, agreed to be barred from the securities industry over allegations that he misled customers and caused them to pay higher prices.
Chin “generated extra revenue for Goldman by concealing the prices at which the firm had bought” various securities, according to a statement Tuesday from the Securities and Exchange Commission. Chin also agreed to pay $400,000 to settle the case, without admitting or denying the allegations.
“Chin repeatedly abused his fundamental duty to serve as an honest transmitter of market information so he could increase Goldman’s trading profits and, indirectly, his own compensation,” said Michael J. Osnato, head of the complex financial instruments group at the SEC’s enforcement division.
From 2010 until 2012, Chin deceived buyers of RMBS by suggesting he was actively negotiating a price between customers when in reality he was selling the bonds out of the bank’s inventory, according to the SEC. Chin will pay $200,000 in disgorgement, $50,000 in prejudgment interest and a $150,000 penalty.
After being fired by Goldman Sachs in 2012, Chin joined Tilden Park Capital Management, a hedge fund founded by former colleague Joshua Birnbaum. Chin voluntarily left earlier this year, people with knowledge of the matter have said.
“We terminated Mr. Chin in 2012 for reasons detailed in his” regulatory records, Michael DuVally, a Goldman Sachs spokesman, said in a phone interview, declining further comment.
Tai Park, Chin’s lawyer at Park Jensen Bennett LLP, didn’t immediately respond to e-mails and phone messages.
— With assistance by Matt Scully