Another Insider Trading Case

Earlier this week we discussed the Commission’s insider trading cases in Panuwat — the “shadow” insider trading action — and Loudon, a case centered on the misappropriation of inside information from the Defendant’s wife. The former ended in a jury verdict in favor of the Commission. The latter ended in a settlement of the SEC’s action and the filing of parallel criminal charges. To close out the week there is yet another insider trading case. This time the action centers on the misuse of information obtained from defendant’s employer, SEC v. Wong, Civil Action No. 1:24-cv-04231 (S.D.N.Y. Filed June 3, 2024).

Defendant Andre Wong has been employed by NeoPhotonics Corporation for years. His most recent position is vice president of product line management. The firm is a designer and manufacturer of photonics products – devices and systems that generate, manipulate or detect light.

This action centers on an announcement on November 4, 2021, statingthat Mr. Wong’s employer would be acquired by Lumentum Holdings Inc. Prior to the announcement date Mr. Wong learned about the plan to acquire NeoPhotonics from a close friend employed by Lumentum. After receiving the information Defendant purchased 10,0000 shares of NeoPhotonics stock. Mr. Wong had never traded in the firm’s securities or those of other companies engaged in the same line of business.

Following the deal announcement the share price of the stock increased by about 39%. This increased the value of Mr. Wong’s holdings to about $62,000. The next year the FBI met with Defendant and asked about the stock. Mr. Wong denied knowledge of the acquisition deal. He also created documents designed to conceal the meeting with his friend during which the then potential deal was discussed. The complaint alleges violations of Exchange Act Section 10(b). The case is in litigation. See Lit. Rel. No. 26016 (June 4, 2024).