(Bloomberg) -- A former Goldman Sachs Group Inc. banker was sentenced to three months in prison for using a secret account to reap thousands of dollars in illegal profits by trading on inside information about company clients.
Woojae "Steve" Jung, 38, a South Korean citizen from San Francisco who once worked as a vice president at Goldman Sachs, pleaded guilty in December to helping a friend trade by pointing him to stocks Jung had illicit tips on. Prosecutors allege Jung made more than $130,000 in illegal profits by trading through the alias brokerage account tied to the friend in South Korea.
“Woojae Jung used material nonpublic information stolen from his investment bank employer to net nearly $130,000 in illegal gains," U.S. Attorney Geoffrey Berman in Manhattan said in a statement.
Prosecutors recommended that Jung serve 18 to 24 months behind bars.
Patrick Lenihan, a Goldman Sachs spokesman, had no immediate comment on the sentencing.
More: Ex-Goldman Sachs Banker Admits in Court to Insider Trading
Jung was charged in May 2018 with conspiracy and securities fraud for running the scam from 2015 to 2017. He had joined the bank after graduating from Wharton business school, was promoted from associate to vice president and moved to San Francisco from New York in 2015. Goldman put him on leave after he was charged, and he left the firm in June 2018, according to Financial Industry Regulatory Authority records.
Prosecutors say Jung closed a personal brokerage account shortly after joining the bank and opened a bank-approved one to comply with internal policies and allow the company to track his trading. In reality, they said, he secretly opened a separate account and used it to trade in shares of at least 10 companies based on inside information he got about deals involving the bank’s customers.
His trades involved companies including the New York-based software maker CA Inc., the Dutch technology firm NXP Semiconductors NV and FEI Co., an Oregon-based supplier of scientific instruments for nanoscale applications.
Jung pleaded guilty to securities fraud over the trades in the securities of KLA-Tencor Corp. from October 2015 to October 2016, based on inside tips he had learned through his job about a pending merger. Lam Research Corp. agreed to acquire KLA-Tencor for $10.6 billion in October 2015, but Lam gave up on the deal a year later after U.S. regulators said the merger would harm competition.
The case is U.S. v Jung, 18-cr-518, U.S. District Court, Southern District of New York.
(Updates with background of scam. A previous version of this story corrected the name of the U.S. Attorney.)
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