U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22958 / March 31, 2014
Securities and Exchange Commission v. Ching Hwa Chen, Civil Action No. 5:14-cv-01467 (U.S. District Court for the Northern District of California)
The Securities and Exchange Commission today charged a Silicon Valley man with insider trading ahead of Informatica Corporation's announcement that it would miss its quarterly earnings target based on confidential information he gleaned from his wife, a tax director at Informatica.
The SEC alleges that Ching Hwa Chen of San Jose, Calif., profited from gleaning confidential information in mid-2012 that his wife's employer, Informatica, would miss its quarterly earnings target for the first time in 31 consecutive quarters. During a drive to vacation in Reno, Nev., Chen overheard business calls by his wife, who previously advised Chen not to trade in Informatica securities under any circumstances. However, after they returned from Reno, he established securities positions designed to make money if the stock price fell. Informatica's shares declined more than 27 percent after it announced the earnings miss, and Chen realized nearly $140,000 in profits. Without admitting or denying the allegations, Chen agreed to pay approximately $280,000 to settle the SEC's charges.
The SEC's complaint charges Chen with violations of Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. Chen has settled the SEC's charges without admitting or denying the allegations. He has agreed to the entry of a judgment enjoining him from future violations of the relevant provisions of the Exchange Act, and to pay disgorgement and prejudgment interest of $142,365, and an additional penalty equal to his profits of $138,068.The SEC's investigation was conducted by Kashya K. Shei under the supervision of Erin E. Schneider, Michael S. Dicke, and Jina L. Choi of the San Francisco Regional Office. The SEC acknowledges the assistance of the Options Regulatory Surveillance Authority (ORSA) in this matter.