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Litigation Release No. 20636 / July 3, 2008

U.S. Securities and Exchange Commission v. Jennifer Xujia Wang and Ruben Chen a/k/a Ruopian Chen, Civil Action No. 07-CV-3715 (S.D.N.Y.) (AKH)

Former Morgan Stanley and ING Investment Management Services Securities Professionals Settle SEC Insider Trading Charges

The Securities and Exchange Commission announced today that on July 3, 2008, the Honorable Alvin K. Hellerstein, United States District Judge for the Southern District of New York, entered a final judgment against Jennifer Xujia Wang, a former employee of Morgan Stanley & Co., Inc., and her husband, Ruben Chen a/k/a Ruopian Chen, a former employee of ING Investment Management Services, LLC, in SEC v. Wang, et al., C.A. No. 07-CV-3715, an emergency insider trading case the Commission filed on May 10, 2007. On that same day, the Court issued a temporary restraining order, which among other things, froze the defendants' assets and on May 18, 2007, following the consent of the defendants, the Court issued a preliminary injunction.

The criminal authorities arrested and charged Chen and Wang the same day the Commission filed its emergency action. On September 5, 2007, Chen and Wang pled guilty to conspiracy to commit securities fraud and insider trading. On December 4, 2007, Chen and Wang were each sentenced to 18 months in prison, to be served consecutively. Chen surrendered on March 3, 2008 and is currently incarcerated.

The Commission's amended complaint alleges that Chen and Wang used online brokerage accounts in Wang's mother's name, Zhiling Feng, to purchase securities of companies on the verge of announcing they would be acquired. Wang and Chen used material non-public information from Wang's then employer, Morgan Stanley, which was contacted to provide services in connection with the acquisitions. Wang and Chen obtained illegal profits of $727,733 by trading on the basis of material nonpublic information before the public announcements of five impending acquisitions: Town & Country Trust; Glenborough Realty Trust; Genesis HealthCare Corporation; Penn National Gaming, Inc.; and American Financial Realty Trust.

Without admitting or denying the allegations in the amended complaint, Chen and Wang consented to the entry of a final judgment which: (1) permanently enjoins them from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; (2) orders them to pay jointly and severally disgorgement of $727,733, plus prejudgment interest of $57,096, for a total of $784,829; and (3) imposes a civil penalty against each of $50,000, such penalty amounts having been limited based on the defendants' sworn representations in their statement of financial condition. Chen and Wang also consented to the entry of Commission orders barring Chen from association with any investment adviser and Wang from association with any broker-dealer or investment adviser.

For further information, please see Litigation Rel. No. 20112 (May 10, 2007).



Modified: 07/03/2008