Federal regulators on Friday froze the assets of five Chinese nationals suspected of pocketing $29 million after getting tipped that DreamWorks Animation was about to be bought by Comcast.
The five are suspected of trading on inside information, the Securities and Exchange Commission said.
The SEC moved after learning that the five, who had never invested in the studio behind last year’s “Trolls” movie, accounted for 17 percent of all trading in DWA three weeks before Comcast’s April 2016 $41-per-share acquisition.
On Feb. 3, the FBI served a search warrant on a Hong Kong investor at the San Jose International Airport — just before he boarded a plane for China.
Soon thereafter, “a flurry of activity in the five brokerage accounts ensued,” the SEC said.
The five brokerage accounts were owned by the elderly parents of Shaohua (Michael) Yin, the alleged leader of the inside trading ring, the SEC said.
The accounts and their contents were frozen by a court order on Friday.
The SEC did not say how the five came into the inside information.
Investigators praised the “analytic investigative tools [that] enabled us to determine who was behind the suspicious trading.”
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