(Adds comment from law firm and MIT and details on bail)
By Nate Raymond
BOSTON, July 12 (Reuters) - A research scientist at Massachusetts Institute of Technology was arrested on Wednesday on charges that he engaged in insider trading based on information he obtained from his wife, a corporate lawyer working on a deal involving a mining company.
Fei Yan, 31, was arrested in Massachusetts after federal prosecutors in Manhattan accused him of trading last year on inside information about South Africa's Sibanye Gold Ltd planned $2.2 billion acquisition of Stillwater Mining.
The U.S. Securities and Exchange Commission in a related lawsuit accused Yan of netting $120,000 by placing trades ahead of the Stillwater deal and another merger based on information he obtained from his wife, an associate at a corporate law firm.
The law firm was not identified in court papers, but in a statement, the London-based international law firm Linklaters confirmed it had employed the associate.
"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.
Yan, a citizen of China, had been employed as a post-doctoral associate in MIT's Research Laboratory of Electronics, according to Kimberly Allen, a spokeswoman for MIT. She referred further comments to the U.S. Attorney's Office in Manhattan.
He was charged in a criminal complaint with securities fraud and wire fraud. Following a hearing in federal court in Boston, Yan was released on a $500,000 unsecured bond.
A court-appointed lawyer for Yan did not respond to requests for comment.
Authorities said that beginning in August, Yan's wife became involved in working on the Stillwater deal in her role as an associate in the New York offices of the law firm retained by Sibanye to represent it in the negotiations.
She continued to work on the deal through the time it was announced in December, the complaint said.
By then, Yan had made multiple profitable trades in Stillwater's stock using a brokerage account he established in the name of his mother in China, the criminal complaint said.
Shortly before the deal was announced, Yan conducted online research related to insider trading, searching for how the SEC detects unusual trading and accessing several articles about insider trading, the complaint said.
After the companies announced their proposed merger on Dec. 9, Yan began selling Stillwater call options he had purchased, making a profit of $109,420, the complaint said.
The case is U.S. v. Yan, U.S. District Court, Southern District of New York, No. 17-mj-1073. (Editing by Tom Brown and Matthew Lewis; Editing by Lisa Shumaker)