Former Morgan Stanley executive jailed for insider trading

September 18th, 2009 - 5:19 pm ICT by IANS  

Hong Kong, Sep 18 (DPA) A former Morgan Stanley executive was jailed Friday for seven years for what a judge called his “sheer greed” in Hong Kong’s biggest insider trading case.
Du Jun, 40, a former managing director of Morgan Stanley Asia, bought $11.22 million in shares in Citic Resources after getting inside information about an acquisition.

The deal in 2007 earned him a profit of nearly $3 million after he had borrowed millions of US dollars to allow him and his wife to snap up shares in the company.

The banker, who began working with Morgan Stanley in Hong Kong in 2001, was convicted last week of nine counts of insider trading and one count of advising his wife to deal in Citic Resources shares.

Sentencing him to jail for the maximum possible jail term of seven years and fining him $3 million, District Court judge Andrew Chan said Friday that Du had been “driven by sheer greed”.

Chan added that the banker’s actions had also seriously undermined the integrity of the financial markets.

Du, who earned a bonus of more than $2 million in the year before his offences, was fired by Morgan Stanley after the deal was discovered and fled to his native Beijing.

Hong Kong’s Securities and Futures Commission froze millions of US dollars of his assets in the territory as an investigation into his share dealings was launched.

In a bizarre twist, he was only brought to justice after being arrested last year when he flew back to the city to collect a painting and an air purifier from his flat.

Hong Kong introduced a law against insider dealing in 2003 and has secured 10 convictions and six jail terms so far. Du’s case involves the largest sums to date.

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