A former rookie securities analyst who pleaded guilty to participating in the second biggest insider trading case in history was sentenced to three years’ in prison today by a federal judge who told him, “You had a brilliant future and you blew it.”
Stephen Wang, 24, stood motionless as U.S. District Judge Kevin Duffy lectured him about his illegal act before imposing the sentence.
Wang, who pleaded guilty Sept. 8, could have received five years for each of three fraud counts against him.
Shaking his head, Duffy said, “Stephen Wang, I hope to God you never end up in a court of law again.”
Wang, a former junior analyst at the investment firm Morgan Stanley Group Inc., admitted to scheming with Taiwan-born businessman Fred C. Lee to profit on secret tips about impending corporate takeovers that Morgan Stanley was handling. Lee, who is not in the United States, allegedly made $19 million on the information and gave $200,000 to Wang.
The Securities and Exchange Commission, which sued the pair in late June, had demanded the return of the illegal profits plus triple damages for a total of $76 million, making it the second biggest insider trading case behind that of convicted felon Ivan Boesky.
In 1986, Boesky agreed to pay a $100 million penalty to settle charges of trading on insider information. He is serving a three-year prison term after pleading guilty last year to conspiring to file a false statement with the SEC.
Before Wang was sentenced, he told Duffy, “I’m deeply sorry for what I’ve done. I’ve incurred a lot of debts and losses of other people. I’m going to try to make amends for it.”
Duffy, calling it a particularly troubling case, rebuked Wang because he had grown up in an affluent family and had no excuse for what he did.
“Apparently, the first time you could have been a crook, you were,” Duffy said.