Since 2014, I have been tracking the SEC's trials and the results in each case (FY 2014 results here; FY 2015 results here). On Wednesday, January 14, 2016, a jury in the U.S. District Court for the Eastern District of Pennsylvania returned a verdict in favor of the SEC in the agency's second federal court trial of FY 2016 (which began on October 1, 2015).
In the case of SEC v. Bonan Huang, et al., which the SEC filed in January 2015, the SEC alleged that Nan Huang traded on inside information that he illegally obtained from his employer, Capital One Financial Corporation. Specifically, the SEC alleged that Nan Huang, a data analyst in the company's fraud department, searched Capital One's
nonpublic database that recorded the credit card activity for millions of customers at numerous, predominantly consumer retail corporations. Huang conducted hundreds, if not thousands, of keyword searches of this database. These searches, which were not done in furtherance of their employment duties, allowed Huang to view and analyze aggregated sales data for the companies he searched.
The SEC charged Huang with trading based on "this material, non-public information in advance of the public release of quarterly sales announcements by these companies." The SEC announced that following a trial, the jury found that Huang's conduct violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. As I discussed here, another defendant charged in the same alleged scheme, Bonan Huang, settled the SEC's case alleging similar charges on December 3, 2015.
Following the verdict in this trial, the SEC's scorecard in FY 2016 now includes two trials. In both of those cases, the SEC has achieved outright victories (in which it won on all of its claims). Here is the list as it currently stands:
SEC v. National Note of Utah and Wayne L. Palmer: VERDICT—FOR SEC (Dec. 2015)
SEC v. Bonan Huang, et al.: VERDICT—FOR SEC (Jan. 2016)