[Image: Goldman Sach's offices in Jersey City, NJ]

by Howard Haykin

The luster is off Woojae “Steve” Jung’s Goldman Sachs investment banking career, after the SEC charged him with repeatedly using his access to highly confidential information to place illicit and profitable trades in advance of investment banking deals. The firm was not named in the complaint.

SEC FINDINGS.    Jung, 37, is a South Korean citizen who resides in San Francisco, CA. He joined Goldman Sachs in July 2012, after graduating from Wharton Business School. He worked in the New York office as an investment banking associate until July 2015, at which time he moved to Goldman’s San Francisco office, where he currently serves as a Vice President of Investment Banking.

At the time he joined Goldman, Jung held a trading account in his own name at Interactive Brokers. But as mandated by Goldman Sachs’ Personal Trading Policy, Jung closed that account and opened a new brokerage account at Fidelity Brokerage Services, which the firm approved for its investment bankers. The Investment Bank directly received copies of Jung's Fidelity account statements, reflecting his trading in that account, as required by the Investment Bank's Personal Trading Policy.

Unbeknownst to the firm, however, a second Interactive Brokers trading account was opened in August 2012 - registered in the name of Jung's friend, relief defendant Sungrok Hwang (the "Hwang Account"), who reportedly lives in Seoul Korea. It was through the Interactive Brokers electronic trading system that the illicit trades were effected.

In order to place a trade through, a user must first log in to the system using a unique login name and password associated with the account. So, when a user successfully logs in to an Interactive Brokers account, the firm's computer server records the internet protocol address ("IP address") used by the user.

Using the broker-dealer’s log-in records, the SEC were able to establish that, from February 2015 through July 2017 and in the months leading up to that relevant period, Jung, directly or indirectly, used the Hwang Account to surreptitiously trade in the securities of at least 12 publicly traded companies ahead of announcements of mergers, acquisitions, and tender offers that were being serviced by Goldman's Investment Bank.

All told, Jung is accused of making $140,000 in illegal profits by trading through the Interactive Brokers account.

For further details on this case, click on…

• Goldman Sachs Vice President Charged with Insider Trading (Bloomberg)
• SEC Complaint