Ex-Morgan Stanley analyst, husband, get 18 months in jail for insider trading

05 December 2007

Former Morgan Stanley financial analyst Jennifer Wang and her husband Ruopian Chen — an ex-hedge fund analyst at ING — were each sentenced to a year-and-a-half in jail for insider trading, on Tuesday 4 December.

In an unusual twist to the case, US District Judge Colleen McMahon sentenced the couple to serve their sentences one after the other, to allow at least one of them to look after their infant son.

McMahon said her husband had worked for Morgan Stanley as an investment banker, and rejected a plea by one of the defence lawyers to not send Wang to jail, so she could be with her son. She said would not let Chen “take the fall for both“, because Wang was more culpable.

Prosecutors said the couple traded in the securities of the Town and Country Trust, Glenborough Realty Trust and Genesis HealthCare, based on non-public information, from December 2005 to March 2007.

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 Corporation of Canada. The couple conducted the trades in a brokerage account set up in the name of Wang''s mother, who lives in Beijing.

Wang worked as a vice president in Morgan Stanley''s finance department and Chen was a vice president at ING Investment Management Americas. The two resigned earlier this year from their respective employers.