Securities News

Former Morgan Stanley Financial Analyst Arrested For Insider Trading

MICHAEL J. GARCIA, the United States Attorney for the Southern District of New York, and MARK J. MERSHON, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation ("FBI"), announced today that JENNIFER WANG, 31, and her husband RUBEN CHEN, 34, of Englishtown, New Jersey, were arrested today on insider trading charges. The trading allegedly took place based on material nonpublic information 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 ING analyst of hedge funds, allegedly netted over $600,000 from the scheme. According to the four-count Complaint filed in Manhattan federal court:

From December 2005 through March 2007, WANG and CHEN traded in the securities of Town and Country Trust ("Town and Country"), Glenborough Realty Trust ("Glenborough"), and Genesis Health Care ("Genesis"), based on nonpublic information WANG obtained from her employer Morgan Stanley 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, then a vice-president in Morgan Stanley’s finance department, 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 of the Fund of Funds department at ING Investment Management Americas. Trading in these securities, conducted in an account established in WANG’s mother’s name, netted over $600,000. Read more at newyork.fbi.gov.

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	Did You Know?
	Transfer Trades: Entries made upon the books of Futures Commission Merchants Transfer Trades: Entries made upon the books of Futures Commission Merchants for the purpose of: (1) transferring existing trades from one account to another within the same firm where no change in ownership is involved; (2) transferring existing trades from the books of one FCM to the books of another FCM where no change in ownership is involved. Also called Ex-Pit Transactions.