The US Securities and Exchange Commission recently reached a settlement with Tian “Tony” Tian, a Massachusetts consultant, to resolve allegations that he engaged in insider trading while advising an unnamed foreign investment firm on the merger of Graf Industrial Corp., a Special Purpose Acquisition Company, and the Velodyne Lidar, Inc. According to the facts alleged in the Cease-and-Desist Order, Tian breached the duty he owed to the investment firm when he purchased more than $208,000 in Graf shares and warrants while in possession of material nonpublic information (“MNPI”) regarding the merger. After the merger was announced publicly on June 26, 2020, the prices of Graf shares and warrants increased significantly, enabling Tian to allegedly generate approximately $72,000 in unlawful profits.
According to the order, without admitting or denying the SEC’s allegations, Tian agreed to cease and desist from committing further violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and was barred from serving as an officer or director of registered company. Tian also agreed to pay just over $72,000 in disgorgement, more than $3,300 in prejudgment interest and a civil money penalty of approximately $72,000.