14 December 2004 – LAWFUEL – First with law news – The United States Attorney for the Northern District of California announced that Min T. Ma of San Francisco was charged with two counts of criminal insider trading. Ma was an employee of desktop publishing company Bowne Business Solutions where he worked on desktop publishing for Merrill Lynch.
In a related proceeding, the United States Securities and Exchange Commission filed civil insider trading charges against both Min T. Ma and his girlfriend, Joyce Manni Ng, another former employee of Bowne Business Solutions.
The Criminal Action Against Ma
According to the information, Mr. Ma, 28, allegedly performed desktop publishing work at Merrill Lynch that included nonpublic information that SangStat Medical Corporation and Applied Molecular Evolution, Inc. were the potential targets of mergers with other publicly-traded corporations. Ma is charged with acting on the basis of misappropriated information to buy stock in both companies before the mergers were announced and selling the stock after the public announcement of the mergers, when the stock prices of both companies skyrocketed. Ma allegedly obtained net proceeds of $197,258 and gross proceeds of $386,590 in 2003. The United States alleges that Ma signed an agreement with Merrill Lynch explicitly prohibiting such trading.
U.S. Attorney Kevin V. Ryan stated, “Federal securities laws are intended to ensure honest markets and to promote investor confidence. All employees with inside information – including clerical staff – must abide by these laws to maintain the integrity of our markets.”
Mr. Ma waived indictment by a federal grand jury and made his initial appearance in federal court in San Francisco today where he pled not guilty and was released on his own recognizance. The defendant’s next scheduled appearance is on December 16, 2004 at 2:30 p.m. before Judge White.
The maximum statutory penalty for each count of insider trading in violation of 15 U.S.C. § 78j(b), 15 U.S.C. § 78ff(a), and 17 CFR § 240.10b-5 is 20 years, and a fine of $5,000,000, plus restitution. However, any sentence following conviction would be dictated by the Federal Sentencing Guidelines, which take into account a number of factors, and would be imposed at the discretion of the Court. An information only contains allegations against an individual and, as with all defendants, Mr. Ma must be presumed innocent unless and until convicted.
The prosecution is the result of an investigation by Special Agent Omer Meisel of the Federal Bureau of Investigation. Anne-Christine Massullo and Hartley M. K. West are the Assistant U.S. Attorneys prosecuting the case with the assistance of Tania Korn and Katie Cannuli.
The Civil Action Against Ma And Ng
The Securities and Exchange Commission’s complaint alleges that Mr. Ma and his girlfriend, Joyce Manni Ng, 27, reaped approximately $438,000 in illegal profits by trading ahead of several mergers they learned about while preparing documents for investment banking firm Merrill Lynch. According to the complaint, Mr. Ma and Ms. Ng repeatedly bought stock in companies that were either Merrill Lynch clients seeking to be acquired, or acquisition targets of Merrill Lynch clients. On numerous occasions between May and November 2003, Mr. Ma and Ms. Ng bought stock in three public companies – Oak Technology, Inc., SangStat Medical Corporation, and Applied Molecular Evolution, Inc. – shortly after working on confidential deal documents. Mr. Ma and Ms. Ng invested over $400,000 in these illegal trades, several times their combined annual income. After the mergers were announced and the stock prices skyrocketed, the couple sold their shares to obtain gross proceeds of more than $850,000, essentially doubling their money through the illegal use of inside information.
Helane L. Morrison, District Administrator for the SEC’s San Francisco District Office, said, “Individuals hired to work on confidential business transactions have a duty not to trade on such information. Profiting from inside information is illegal, whether you’re the executive negotiating the merger or the clerk typing up the documents.”
The Commission’s complaint charges Mr. Ma and Ms. Ng with trading on the basis of material, nonpublic information in violation of the federal securities laws. The Commission seeks, among other relief, disgorgement of Ma’s and Ng’s illegal trading profits and civil monetary penalties.
For further information on the Securities and Exchange Commission’s action, contact Helane L. Morrison, District Administrator, at (415) 705-2450, or Marc J. Fagel, Assistant District Administrator, at (415) 705-2449.
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A copy of this press release and related court filings may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can . Related court documents and information may be found on the District Court website at www.cand.uscourts.gov or on .
All press inquiries to the U.S. Attorney’s Office should be directed to Luke Macaulay at (415) 436-6757 or by email at Luke.Macaulay3@usdoj.gov .
