SEC Charges Six in $500,000 Cummins Meritor Insider Trading Case
SEC alleges six defendants tipped or traded before Cummins' 2022 Meritor acquisition, generating over $500,000 in profits; judgments await court approval.
Summary
On September 28, 2026, in Litigation Release No. 26650, the SEC said it filed case No. 1:26-cv-03366 in District of Columbia federal court, charging Fan “Jocelyn” Yang, Jing Tian, Zijun Zhang, Shuchen Zhu, Chong Zhang and Hanxiong Bo with tipping or trading before Cummins, Inc.’s February 22, 2022 announcement of its Meritor, Inc. acquisition. Yang, a former Cummins corporate development accountant, allegedly gave material nonpublic information to Tian, her husband and a former Cummins engineer, both from Carmel, Indiana. Tian allegedly passed it, with Yang’s knowledge, through a friend to the friend’s wife, Zijun Zhang of Chengdu, Sichuan, China. Zhang allegedly bought Meritor securities and tipped Zhu of Chantilly, Virginia, who traded and tipped Chong Zhang of Bellevue, Washington, and Bo of North Hollywood, California. The four traders allegedly made over $500,000.
Yang and Tian, previously criminally charged by the U.S. Attorney’s Office for the District of Columbia, consented to proposed final judgments permanently barring Exchange Act Section 10(b) and Rule 10b-5 violations. Court approval and SEC-requested civil penalties remain pending. Without admitting the allegations, the four traders accepted equivalent injunctions, subject to approval. Zijun Zhang would pay $143,034 disgorgement, $12,882 interest and a $143,034 penalty; Zhu, $172,366 disgorgement and a $119,191 penalty, plus an industry association bar; Chong Zhang, $146,253 disgorgement and a $48,751 penalty; Bo, $38,955 disgorgement, $3,508 interest and a $38,955 penalty.
The SEC Market Abuse Unit’s Analysis and Detection Center originated the case using trading-pattern analytics. Han Nguyen, John Rymas, Matthew Wong and Julia C. Green investigated under Joseph G. Sansone; Judson Mihok assisted under Gregory R. Bockin, with support from the U.S. Attorney’s Office, FBI and FINRA.
Positives
- All six defendants consented to proposed final judgments, potentially advancing resolution without a contested civil trial.
- Specified judgments would recover disgorgement, interest and civil penalties from Zijun Zhang, Shuchen Zhu, Chong Zhang and Hanxiong Bo.
- Shuchen Zhu’s proposed judgment includes a bar from association with brokers, dealers or investment advisers.
- The SEC’s Analysis and Detection Center identified the matter through data analysis of suspicious trading patterns.
- The SEC coordinated with the U.S. Attorney’s Office, FBI and FINRA on the case.
Risks & concerns
- Four defendants allegedly generated over $500,000 by trading Meritor securities with material nonpublic acquisition information.
- The alleged information chain began with a former Cummins corporate development accountant who had access to the pending transaction.
- The alleged tip traveled through relatives and friends across Indiana, China, Virginia, Washington and California.
- Yang and Tian previously faced related criminal charges, while their civil penalty amounts remain for the court to determine.
- All proposed final judgments remain subject to court approval.
