Stephen Wang to Give Up $127,000 in Insider Profits

A former junior securities analyst convicted of insider trading in a major fraud scandal will pay back more than $127,000 in illegal profits under an agreement approved Tuesday by a federal judge.

In addition, a college friend of the 24-year-old trader, Stephen Wang, was accused in U.S. District Court in Manhattan of making $30,000 in profits from illegal information supplied by Wang in a separate scheme.

U.S. District Judge Richard Owen approved a final settlement in which Wang, without admitting or denying wrongdoing, agreed to pay $127,585 to satisfy claims arising from his role in what the government has called one of the biggest inside trading frauds in history.

SEC Complaint

Under the settlement between Wang and the Securities and Exchange Commission, a court-appointed receiver will oversee and distribute the money to cover claims by investors who said they lost money because of Wang.

The SEC also filed a complaint charging that Jerome B. Cronin, also 24, of Chicago, allegedly traded in stocks of at least six companies using tips provided by Wang, who was sentenced last October to three years in jail.

In a settlement with the SEC also approved Tuesday, Cronin agreed to pay back $20,000 in illegal profits. He did not admit or deny guilt.

The SEC’s civil complaint alleges that Cronin violated anti-fraud provisions and received non-public information from Wang about upcoming tender offers and other pending corporate action.

The alleged illegal transactions occurred via telephone between Wang in New York and Cronin in Chicago, who knew each other as undergraduates at the University of Illinois, from July, 1986, through at least September, 1987, according to the complaint.