Wife’s Tips To Husband Net $600,000
LAWFUEL – The US Law Newswire – MICHAEL J. GARCIA, the United States Attorney for the Southern District of New York, announced today that JENNIFER WANG, 31, and her husband RUBIN CHEN, 34, of Englishtown, New
Jersey, pleaded guilty in Manhattan federal court to insider
trading charges. The trading took place based on material
nonpublic information that WANG obtained from her former
employer, Morgan Stanley, regarding acquisitions of three
publicly traded companies.
WANG, formerly a financial analyst at
Morgan Stanley, and CHEN, a former analyst at a hedge fund in
Manhattan, netted over $600,000 from the scheme.
At today’s proceeding before United States District
Court Judge COLLEEN McMAHON, WANG and CHEN each pleaded guilty to
one count of conspiring to commit insider trading and three
counts of insider trading. According to statements made during
the guilty pleas, and documents previously filed in this case:
From December 2005 through March 2007, WANG and CHEN
traded in the securities of Town and Country Trust, Glenborough
Realty Trust, and Genesis Health Care, based on material,
nonpublic information WANG — then a vice-president in Morgan
Stanley’s finance department — obtained from her employer
regarding those companies. WANG and CHEN conducted their trading
in an account — the existence of which they hid from their
respective employers — set up in the name of WANG’s mother.
With respect to Town and Country Trust and Glenborough
Realty Trust, Morgan Stanley was advising its subsidiary, Morgan
Stanley Real Estate (“MSRE”), on the acquisition of both
companies.
WANG had access to documentation regarding MSRE’s
attempted but unsuccessful acquisition of Town and Country, and
successful acquisition of Glenborough, prior to any public
disclosure of MSRE’s bids for the companies. As to Genesis, in
December 2006, Morgan Stanley’s Principal Transactions Group
received information relating to financing a potential
acquisition of Genesis. WANG obtained access to a shared
computer drive that contained information relating to the
potential acquisition. WANG passed the information she obtained
from Morgan Stanley to her husband CHEN, then the vice-president
who managed hedge fund investments in the Fund of Funds
department at another investment bank. Trading in these three
securities, conducted in the account established in WANG’s
mother’s name, netted over $600,000.
WANG and CHEN resigned earlier this year from their
respective employers following a Securities and Exchange
Commission (“SEC”) inquiry and internal investigations by Morgan
Stanley and ING.
WANG and CHEN are scheduled to be sentenced by Judge
McMAHON on December 7, 2007 at 10 a.m. They each face a maximum
sentence of 65 years in prison.
Mr. GARCIA, a member of the President’s Corporate Fraud
Task Force, praised the efforts of the Federal Bureau of
Investigation and the SEC in the investigation of this case. He
added the investigation is continuing.
