Inside Trader Was a Snoop, SEC Says
SAN JOSE (CN) - A retiree made $138,000 by illegally trading on information about Informatica stock which he learned by overhearing his wife's phone conversations, the SEC claims in court.
The SEC sued Ching Hwa Chen, 61, of San Jose, a retired engineer, in Federal Court.
His wife is not a party to the case.
Chen shorted Informatica stock after he "suspected that there might be a revenue miss while on vacation with his wife, Informatica's Senior Tax Director, by overhearing her business phone calls and observing her unusual work schedule," the SEC says in the brief complaint.
It continues: "Chen then misappropriated this information for his own benefit by buying put options and selling short Informatica's common stock. After the announcement of the revenue miss, Informatica's stock price dropped more than 27 percent, yielding Chen more than $138,000 in illicit profits."
The SEC claims that Chen did this "unbeknownst to his wife."
He overheard her on a 4-hour drive to Reno, a vacation day which his wife devoted nearly entirely to calls about Informatica missing its revenue target for the first time in 8 years, the SEC says in the complaint.
"Chen's wife had previously advised Chen that he was not to trade in Informatica securities under any circumstance and she believed he understood her concerns," the SEC says.
But apparently not.
The SEC seeks disgorgement, a fine and an injunction.