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statutorily obligated to keep the information confidential and
not to use or disclose it for his personal benefit.
In late 1986, petitioner met Mr. Fred Lee, who was then a
client of Morgan Stanley. Mr. Lee, a Taiwanese national, owned
or had trading authority over a large number of securities and
trading accounts with several domestic and foreign brokerage
firms. Sometime in 1987, petitioner began selling insider
information to Mr. Lee. That information had been obtained in
the course of petitioner’s employment at Morgan Stanley. Mr. Lee
used the insider information to buy and sell corporate
securities, earning an overall profit of approximately $19
million from June 1987 through June 1988.
Mr. Lee paid petitioner, at minimum, $150,000 and $50,000
for the insider information during 1987 and 1988, respectively.
Petitioner admitted that he and Mr. Lee had discussed
petitioner’s receiving an additional $1 million in compensation.
Petitioner received some cash payments directly from Mr. Lee.
Petitioner also received payments in the form of deposits to a
bank account opened in fictitious or nominee names chosen by Mr.
Lee. Petitioner had a power of attorney over the bank account.
In 1987, Mr. Lee paid petitioner at least $50,000 in cash and
$100,000 that was deposited by Mr. Lee into the bank account.
Petitioner spent the $50,000 within a year and did not deposit
any of it into a bank account or keep any record of the money.
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