NEW YORK (Reuters) - A former Morgan Stanley <MS.N> financial analyst and her husband, an ex-hedge fund analyst at ING <ING.AS>, were sentenced to a year and half each on Tuesday for insider trading.
By Paritosh Bansal
NEW YORK (Reuters) - A former Morgan Stanley <MS.N> financial analyst and her husband, an ex-hedge fund analyst at ING <ING.AS>, were sentenced to a year and half each on Tuesday for insider trading.
But in an unusual twist to the case, U.S. District Judge Colleen McMahon sentenced Jennifer Xujia Wang and her husband, Ruopian Chen, to serve their sentences one after the other to allow for at least one of them to be with their infant son.
McMahon, who said her husband had worked for Morgan Stanley as an investment banker, rejected a plea by one of the defense lawyers to not send Wang to jail so she could be with her son.
!ADVERTISEMENT!She said she would not let Chen "take the fall for both."
"Ms. Wang, you are not less culpable. You are more culpable. You are the thief," McMahon told Wang who wept silently. "You have done this to your son."
McMahon sentenced them so that Wang would report to prison after Chen is released and their son has turned 2. She also ordered them to forfeit about $611,000.
Wang and Chen, of Englishtown, New Jersey, pleaded guilty to conspiracy and insider trading charges in September.
They were arrested by the Federal Bureau of Investigation in May and released on bail. Their son was born in New York in June.
Federal prosecutors accused them of trading based on material, nonpublic information that Wang obtained from Morgan Stanley, netting more than $600,000 from the scheme.
Prosecutors said the couple, from December 2005 through March 2007, traded in the securities of Town and Country Trust, Glenborough Realty Trust Inc and Genesis HealthCare Corp, based on nonpublic information.
Glenborough was acquired by a Morgan Stanley affiliate in November 2006. Town and Country announced in late 2005 it would sell itself to investors led by units of Morgan Stanley and Onex Corp <OCX.TO> of Canada.
The two resigned earlier this year from their respective employers. The couple conducted the trades in a brokerage account set up in the name of Wang's mother, who lives in Beijing, prosecutors said.
The U.S. Securities and Exchange Commission also filed civil insider trading charges against the pair.
Wang worked as a vice president in Morgan Stanley's finance department and Chen was a vice president at ING Investment Management Americas.
At one point McMahon, who said she was "mystified and outraged," asked Wang's lawyer to explain why the couple committed the crime.
Wang's lawyer, Catherine Redlich, said she believed cultural differences may have played a factor.
"In People's Republic of China insider trading is only rarely, and not until very recently, prosecuted as an offense," Redlich said.
But McMahon said she had herself worked as a lawyer and the only explanation she could come up with was greed.
"I know what it is to be a professional exposed every day in countless ways to inside information," she said. "You can't possibly not know that you are not allowed to do it."
