NEW YORK (Reuters) - A former Chinese investment fund manager has lost a bid to dismiss charges by the U.S. Securities and Exchange Commission that he made $36 million from insider trading after being tipped about DreamWorks Animation SKG Inc’s acquisition by Comcast Corp and Lattice Semiconductor Corp’s planned acquisition by a private equity fund.
U.S. District Judge Paul Oetken said the SEC had offered enough detail in its civil complaint against Michael Yin to support its claim that he misappropriated confidential information about the planned deals, denying a motion to dismiss the case Yin filed last June.
A lawyer for Yin could not immediately be reached for comment.
Yin worked at Hong Kong-based Summitview Capital Management Ltd before resigning in February 2017, around the time the SEC brought the insider trading charges, according to the agency. Summitview was not accused of wrongdoing and could not immediately be reached for comment.
The agency said that Yin bought more than two million DreamWorks shares through five brokerage accounts in April 2016 shortly before the company’s acquisition by Comcast became public, causing its stock to surge and making Yin $29 million.
The agency said Yin may have been tipped off by his friend Chaofeng Ji, who worked for China-based Legend Capital. Legend was working at the time on a potential partnership with PAG Asia Capital, which in turn knew of the DreamWorks deal because it had made a rival offer for the company, the SEC said.
The SEC said Ji controlled one of the five brokerage accounts and named him as a “relief defendant” for the purpose of seeking disgorgement of funds. He lives in Beijing and no lawyer represents him in the case, according to court documents.
PAG and Legend were not accused of wrongdoing and could not immediately be reached for comment.
Yin also bought more than seven million shares of Lattice through the five brokerage accounts beginning in July 2016, the SEC said, making more than $7 million in profits after Chinese-backed private equity firm Canyon Bridge Capital Partners’ plan to buy the microchip maker became public in November 2016.
The SEC said that Yin learned of Lattice’s planned sale directly from an insider at Canyon Bridge, which was not accused of wrongdoing. The fund declined to comment.
The DreamWorks deal closed in August 2016. The Canyon Bridge deal was blocked by U.S. President Donald Trump in September 2017.
Reporting by Brendan Pierson in New York; Editing by Dan Grebler