A senior index manager at S&P Dow Jones Indices has been charged the U.S. Securities and Exchange Commission and the Justice Department for insider trading.  

According to complaints filed Monday by both entities, Yinghang “James” Yang allegedly used information that he learned on the job to help his friend Yuanbiao Chen, a manager at a sushi restaurant, trade options on companies before they were added to or removed from S&P indices.  

Yang is facing criminal charges and was arrested Monday by the FBI. He has also been suspended from S&P, where he had worked for two years, a spokesperson confirmed Tuesday.

Both Yang and Chen are facing SEC charges.

“Yang abused the trust placed in him by his employer and allegedly broke the law by trading on, and profiting from, nonpublic information that he stole from his employer,” Seth Ducharme, acting U.S. Attorney General for the Eastern District of New York, said in a statement.  

The scheme allegedly began in April 2019, when Yang wrote a check for $3,000 to his co-conspirator, who then deposited it in his personal bank account. Roughly a month later, the co-conspirator opened a brokerage account, the Justice Department’s complaint shows. (Chen was not named in the Justice Department complaint.) 

Between June and October, Yang and Chen allegedly used the account to buy call or put options on publicly-traded companies, according to the SEC complaint. On the days of the trades, S&P would announce after hours that the same companies would be added to or removed from its indices, according to the Justice Department. The positions would then be liquidated, the Justice Department said.


Yang and Chen started small: Each of the early transactions was worth roughly $2,000 or so. For instance, on July 9, they bought T-Mobile call options at 1:25 p.m, according to the SEC complaint. At 5:15 p.m., just after markets closed, S&P announced that T-Mobile would be added to one of its indices. The next morning, Chen and Yang reportedly sold the call options, making $1,096, the SEC said.

But in the middle of September, the trades ramped up. Just before 2 p.m. on September 26, for example, Chen bought call options for Las Vegas Sands, the SEC said. At 5:15, S&P announced the addition of the company to its indices. The reported profit? $325,956.

During that period, Chen and Yang made these types of trades on 14 occasions, the SEC said.   

Then came the payout. On October 4, Chen allegedly wrote Yang three checks totaling $100,000 from the brokerage account, the complaint said. The Justice Department said Yang used this money to make credit card payments, pay off student loans, and fund his own trading activity.   

In total, the duo made $912,082 on the options trading, returning 136 percent on their investments, according to the complaints.  

During this time period, Yang was logging into Chen’s brokerage account from both his home and his workplace, IP address history showed. According to the SEC, using Chen’s account was enough for Yang to hide the trades from his employer, which monitored his personal brokerage account.  

Chen had allegedly misrepresented his trading experience to the brokerage firm, which allowed him to access options trading authorization. When the brokerage firm started asking Chen questions about his occupation and sources of wealth months later, the co-conspirators paused the trading scheme, the SEC’s complaint said.  

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“The allegations describe behavior that is contrary to our company’s code of conduct and deeply held ethical values,” April Kabahar, a spokesperson for S&P, said via email Tuesday. “We hold our employees to the highest standards of honesty and integrity.” 

Yang did not respond to a LinkedIn message seeking comment. Chen could not be reached by presstime.