Linklaters Suspends Associate Tied to Insider Trading
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Summary: The husband of an associate at Linklaters has been arrested for insider trading by using the work his wife was doing to make trades.

Insider trading is taken very seriously by law firms because they are the keepers of sensitive information that could ruin their relationships with clients. The Securities and Exchange Commission also follows suspicious activity very closely. When someone googles “how sec detect unusual trade,” that usually doesn’t look good.


A Massachusetts Institute of Technology researcher has been arrested in Boston on federal charges of insider trading. Prosecutors allege that Fei Yan used his wife, who was a corporate lawyer for Linklaters, to obtain information he then used to buy stocks and options netting him around $120,000 in profit. She has not been charged yet.

Yan also googled phrases like “insider trading in an international account,” according to investigators. His wife advised on cases for the same two companies that Yan, a Chinese citizen, made trades on. London-based Linklaters has since suspended his wife, who was an associate in their New York office. She was working on acquisition deals for Mattress Firm and Stillwater Mining. The mining company was acquired by South Africa’s Sibanye Gold Ltd for $2.2 billion. Linklaters was representing Sibanye in the negotiations which began in August and were announced in December. Mattress Firm was bought by Steinhoff International Holdings, who is Linklaters’ client, for $3.8 billion.

Linklaters said, “We will continue to cooperate fully with the authorities on this matter, and the relevant associate has been suspended, pending further investigation without access to the firm’s systems and confidential information.” Their statement continued, “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. We will continue to cooperate fully with the authorities on this matter.”

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Once the acquisition deals were made public, Yan sold. He tried to avoid detection by placing the trades in a brokerage account under his mother’s name. Co-chief of the SEC Enforcement Division’s Market Abuse unit Joseph G. Sansone said, “Yan attempted to evade detection by researching prior SEC cases against insider traders and using a brokerage account in a different name, but we identified the profitable trades in deals advised by the same law firm and traced them back to him.”

MIT confirmed Yan was employed as a postdoctoral associate in their Research Laboratory of Electronics. He was charged with securities and wire fraud. He was released on a $500,000 unsecured bond. His wife has not been named in any of the filings.

Is there anything law firms can do to protect their confidential information from the family members of their lawyers and staff? Tell us your thoughts in the comments below.

To learn more about other law firms dealing with insider trading charges, read these articles:



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