A vice president of investment banking at Goldman Sachs was arrested and charged with using inside information to place profitable trades in advance of the bank’s investment banking deals.
The U.S. Attorney's office for the Southern District of New York on Thursday accused Woojae “Steve” Jung with using sensitive client information to trade the stocks of companies for which the bank was providing investment banking advisory services, according to a press release. Jung was charged with one count of conspiracy to commit securities fraud and six counts of securities fraud.
“As alleged, Woojae Jung violated his duty to his company and traded on stolen insider information, over and over again," said Geoffrey Berman, Manhattan U.S. attorney, in the press release. "This Office remains committed to enforcing the nation’s securities laws to protect the fairness and integrity of the markets.”
The Securities and Exchange Commission filed civil charges against Jung on the same day. Jung still worked at Goldman when the DOJ and SEC announced the charges, but the investment bank has since put him on leave. Jung worked in the Goldman’s San Francisco and New York offices.
[II Deep Dive: Insider Traders Less Likely to Get Caught if SEC is Far Away]
The SEC complaint alleged that between 2015 and 2017, Jung used an account held in the name of a friend living in South Korea to make the trades. The commission also said in the release that profits amounted to about $140,000. The SEC filed the complaint in federal district court in Manhattan.
“Jung tried to insulate himself by allegedly placing trades in the brokerage account of a friend who lived overseas,” said Joseph Sansone, chief of the SEC's Market Abuse Unit, in a statement. “Like others before him, Jung’s alleged scheme failed when our data analysis uncovered the account’s suspicious trading pattern and, despite Jung’s attempts at evasion, traced the trading back to him.”
“We are aware of the situation regarding Mr. Jung and are cooperating with legal authorities on the matter,” said Michael Duvally, a Goldman Sachs spokesman, in an emailed statement.