Matt Potter 7:30 a.m., March 12
Ex-Qualcomm exec vp charged with insider trading
Former Merrill Lynch broker charged; they used offshore account
Jing Wang, a former executive vice president and president of global business operations at Qualcomm, was today (Sept. 23) charged with insider trading in stock of Qualcomm and Atheros, a company Qualcomm bought.
As a senior Qualcomm executive, Wang was repeatedly warned not to use material, non-public information in stock transactions. The broker involved was Gary Yin, formerly a senior vice president of the San Diego office of Merrill Lynch, a unit of Bank of America.
According to information released by the U.S. Attorney's office, Jing Wang spoke with Yin on how to set up a secret account in the British Virgin Islands that would conceal his trading activities. Jing Wang set up the account and his brother in China, Bing Wang, was falsely listed as the beneficial owner of the nominee account at the tax haven.
As a senior executive, in 2010 Wang learned that Qualcomm would boost its dividend and buy back some of its stock (a maneuver that normally raises the stock price.) Prior to the announcement, Wang told Yin to buy as much Qualcomm stock as he could to stash in the offshore account, according to the indictment.
In late 2010, Wang as an insider learned that Qualcomm intended to purchase Atheros. Wang told Yin to sell Qualcomm stock (the stock of a purchaser normally declines) and spend the proceeds on Atheros (whose stock would go up.) The Atheros stock was purchased for $34 a share. After the announcement, it rose to $44.50.
According to the indictment, in 2011, upon learning Qualcomm would release record results, Wang told Yin to sell the Atheros stock and buy Qualcomm. After release of the information, Qualcomm stock jumped by $4. The U.S. Attorney's office says Wang illegally gained a quarter of a million dollars from these three offshore deals, pulled off with inside information.
This is a criminal complaint charging Wang with obstruction of justice and money laundering, and Yin with conspiracy to commit offenses against the U.S.
Wang was taken into custody today and Yin will appear tomorrow. A warrant has been issued for Bing Wang, who is believed to be still living in China.