A married couple who formerly lived in Laguna Niguel are being sued by the U.S. Securities and Exchange Commission for their alleged involvement in a multimillion-dollar insider trading scheme involving the securities of Sagent Pharmaceuticals Inc.

Zhuobin “Ben” Hong and Caixia Jiang allegedly generated profits of $8.5 million by trading in the securities of Sagent in advance of a July 11, 2016. announcement about the company’s acquisition, according to the complaint filed Monday in Los Angeles federal court.

The SEC’s complaint alleges that the couple obtained confidential information about the acquisition directly or indirectly from a friend and neighbor whose company competed in the bidding process to acquire Sagent.

Hong and Jiang, who lived in Orange County at the time but are now in China, attempted to evade detection by trading through accounts held in the names of relatives living in China, the SEC alleges.

Between November 2015 and June 2016, those newly opened trading accounts amassed more than 1 million shares of Sagent stock, according to the SEC.

On multiple occasions, the defendants’ purchases made up greater than 20% of the total trading volume in Sagent stock on that trading day, which they sold immediately following the acquisition announcement, the complaint alleges.

The case originated from the SEC Market Abuse Unit’s Analysis and Detection Center, which uses data analysis tools to detect suspicious patterns. Enhanced detection capabilities enabled SEC enforcement staff to spot and uncover the unusual trading activity alleged in the complaint, according to the agency.

The SEC’s complaint accuses Hong and Jiang of violating the anti-fraud provisions of the Securities Exchange Act of 1934 and seeks repayment of alleged ill-gotten gains plus interest, penalties and injunctive relief. The complaint also names Hong’s and Jiang’s China-based relatives, Zhuoyan Hong and Haotao Jiang, as relief defendants and seeks to have them repay allegedly illicit gains generated by trading in their brokerage accounts.

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