Business & Tech

MIT postdoc associate accused of insider trading

“Want to Commit Insider Trading? Here’s How Not to Do It.” That was the title of an article a MIT postdoctoral associate allegedly read shortly before he used confidential information to buy stock options that federal prosecutors say made him nearly $120,000.

Fei Yan, 31, was arrested in his Cambridge home Wednesday morning on charges of insider trading. He turned his illegal profit by purchasing and selling options in Stillwater Mining Co. and Mattress Firm Holding Corp., according to complaints filed by the US Attorney’s Office for the Southern District of New York and the Securities and Exchange Commission.

Yan was released on a $500,000 unsecured bond after a hearing in Boston federal court on Wednesday. He could not immediately be reached for comment.


Authorities say Yan’s wife, through her work as an attorney, obtained information about impending acquisitions involving Stillwater and Mattress Firm. The complaints do not name her or her employer, but London-based Linklaters confirmed a Reuters report that Yan’s wife worked there.

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“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,” Linklaters said in a statement.

Yan’s wife was allegedly working on acquisitions involving Mattress Firm and Stillwater in 2016, during the period when Fei Yan began buying stock options in the two firms. Linklaters represented Steinhoff International Holdings NV, which in August 2016 said it was buying Mattress Firm. It also worked with Sibanye Gold Limited of South Africa, which announced its acquisition of Stillwater in December of last year.

The complaints allege that Yan opened an account in his mother’s name at a brokerage firm in June 2016 to use for trading purposes. Federal officials say he purchased 300 shares of Mattress Firm and about 700 call options for Stillwater, which he sold on the first trading day following each acquisition announcement. The SEC alleges Yan made over $9,700 from his Mattress Firm shares and almost $110,000 from the Stillwater call options.

The day that Stillwater’s acquisition by Sibanye Gold was made public, Yan allegedly searched online for “insider trading cases” and “insider trading options.” Three days before, he’d searched, “how sec detect unusual trade,” the complaints allege.


Yan, who is a Chinese citizen, is charged with two counts of securities fraud and one count of wire fraud. If convicted, he could face up to 25 years in prison and as much as $5 million in fines for the security fraud charges, and 20 years in prison and up to a $250,000 fine for the wire fraud charge.

Lauren Feiner can be reached at Follow her @lauren_feiner.