Taiwanese National Accused by SEC : ‘Bon Vivant’ Tied to Insider Trading Scandal
The man accused of making millions on insider trading in the United States is said to be a rich Taiwanese socialite divorce with a doctorate degree and a history of stock dabbling.
The U.S. Securities and Exchange Commission filed a civil complaint Monday accusing Fred C. Lee of making $19 million by trading on tips about impending corporate takeovers given by Stephen Wang Jr., a junior analyst at the Morgan Stanley & Co. brokerage firm.
Wall Street and SEC sources in the United States have described Lee, 38, as a wealthy member of a Taiwanese family who had several trading and bank accounts, interests in real estate, import-export operations and public utilities. He has homes in Hong Kong and McLean, Va., a Washington suburb.
Taiwan newspapers identified the man as Lee Chuan-hong and said he was a major investor in the Taiwan stock market several years ago.
The mass-circulation China Times reported Wednesday that Lee’s “contacts with high-level political and financial circles made him somewhat famous. Lee himself and his story are legendary.”
The United Daily News said Lee’s acquaintances included Tsiang Yien-si, former secretary general of Taiwan’s ruling Nationalist Party, and former Taipei mayor Yang Ching-tsun. It did not elaborate on the nature of the relationships.
An official at the government-run Taiwan Power Co., speaking on condition of anonymity, confirmed that Lee Chuan-hong has been a director of the utility since 1978. A City Bank of Taipei official, also requesting anonymity, said Lee had previously been on the bank’s board.
Lee became general manager of the Taiwan Tea Corp. in 1984 but quit two years later, telling friends and associates he wanted to preach Buddhism in the United States, newspapers said. He reportedly has returned to the United States only on rare occasions since.
An account in the Wall Street Journal quoted unidentified acquaintances of Lee as saying he enjoyed dabbling in the Hong Kong and Taipei stock markets, where insider trading is believed to be widespread.
The acquaintances also were quoted as describing Lee as a “ bon vivant “ divorced father of two, who held largely honorary positions on the boards of some prominent Taiwan businesses.
Lee attended elementary school and college in Taiwan but went to post-graduate school in the United States. In June, 1983, he received a doctorate in education policy and management from the University of Oregon in Eugene, according to Gunvor McWilliams, an official of the school’s registrar office.
