Husband of Linklaters associate charged with using her deals for insider trading
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One of the City of London’s biggest law firms has suspended a US-based lawyer after her husband was accused of insider trading based on information he gleaned from her work on multi-billion dollar mergers.
Fei Yan, 31, a Chinese citizen, was arrested in Boston and charged by federal prosecutors with making more than $120,000 on illegal trades involving two companies that his wife advised while she was based at the New York office of Linklaters. The firm is one of the elite group of “magic circle” legal practices in the City and has a longstanding presence in the US, having opened in New York in 1972.
It was reported yesterday that Yan was arrested after federal prosecutors in Manhattan accused him of trading on inside information last year concerning a planned $2.2 billion (£1.7bn) purchase of Stillwater Mining by South Africa’s Sibanye Gold.
In a related civil legal action brought by Washington’s financial watchdog, the Securities and Exchange Commission, Yan is accused of placing trades ahead of the Stillwater deal and another merger based on information he obtained from his wife, who has not been named.
Yan is understood to be a scientist at the Massachusetts Institute of Technology, one of the world’s leading research universities.
Federal prosecutors have charged him with securities and “wire” fraud. The latter involves allegations of fraud involving postal or electronic communications. At a federal court hearing in Boston, Yan was released on a $500,000 unsecured bond. The Reuters news agency reported that a court-appointed lawyer for Mr Yan did not respond to requests for comment.
According to reports from the US, Linklaters was not identified in court papers, but in a statement the firm confirmed it had employed the unnamed associate. “We will continue to co-operate fully with the authorities on this matter,” said LInklaters, “and the relevant associate has been suspended, pending further investigation, without access to the firm’s systems and confidential information.”
The firm also said: “The duty to respect the confidential nature of our work is the bedrock of our business, our client relationships and the legal profession. We have robust policies in place, including those relating to the handling of confidential information and dealing rules, on which we train all our lawyers and staff.”