Officials say broker helped Qualcomm executive trade on inside information over acquisition.
A former Bank of America Merrill Lynch broker has pleaded guilty to helping a client, a former corporate executive, trade stocks illegally, based on inside information, Assistant U.S. Attorney Eric J. Beste of the Southern District of California said on Wednesday.
Gary Yin, a 54-year-old San Diego resident, pleaded guilty on Tuesday to creating a secret Merrill brokerage account so that Jing Wang, an executive vice president and president of global business operations at Qualcomm Inc., could engage in insider trading in his company's shares and those of an acquisition target, officials said.
Mr. Yin made his plea on criminal conspiracy charges in an appearance before U.S. Magistrate Judge Nita Stormes of California's Southern District, Justice Department officials said. He still faces civil charges brought by the Securities and Exchange Commission.
Mr. Yin purchased shares of Qualcomm for Mr. Wang after the technology hardware company executive learned that the company planned to increase its quarterly dividend and implement a stock repurchase program in 2010, authorities said. When Mr. Wang learned later that year that Qualcomm was considering purchasing Atheros Communications Inc., officials said he asked Mr. Yin to purchase shares of Atheros, as well.
According to the indictment, Mr. Yin then helped Mr. Wang conceal evidence of the insider-trading scheme by setting up a shell company in the British Virgin Islands and moving illicit trading profits into the shell company's brokerage account. Authorities said Mr. Yin took account documents to Mr. Wang's brother in China and arranged to mislead investigators.
Mr. Yin made more than $27,000 from the insider trading scheme, while Mr. Wang made nearly $250,000, according to the SEC.
Mr. Yin is scheduled for a sentencing hearing before U.S. District Court Judge William Q. Hayes on Dec. 16. Both he and Mr. Wang have been released on bond. An arrest warrant has been issued for Mr. Wang's brother, Bing Wang, a citizen and resident of China, which does not have an extradition treaty with the U.S., Mr. Beste said.
Mr. Yin's lawyer did not immediately respond to a request for comment. Mr. Wang's lawyer declined to comment.
Neither Qualcomm nor Merrill Lynch have been charged.
