The SEC alleges that Guolin Ma, traded in OmniVision shares using confidential information he had obtained while advising private equity firms, one of which later joined a consortium that eventually acquired OmniVision, a leading vendor of CMOS image sensors.
Ma is an optical physicist who resides primarily in China and performed technical due diligence for the private equity firms. The SEC has alleged that as a result of this work Ma received non-public strategy documents from the firms and then acquired 39,373 shares in OmniVision during April and May 2014. OmniVision's stock price rose 15 percent when the proposed acquisition was announced in August 2014 (see China moves to buy Omnivision ).
Ma sold the stock and thereby generated $367,387 in illegal profit, the SEC has alleged. The SEC added that Ma has not admitted or denied the allegations in the SEC's complaint but has agreed to pay the SEC the $367,387 plus interest pf $21,986 and a penalty of $367,387. This brings the total settlement to $756,760, which is subject to court approval.
"Guolin Ma breached a duty of trust and confidence to the private equity firms when he bought thousands of shares of OmniVision stock while aware of the impending transaction," said Joseph Sansone, co-chief of the SEC Enforcement Division’s Market Abuse Unit. "It was a costly mistake because the settlement requires him to pay back double his illegal trading profits."
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