Four people have been charged with insider trading on Citizens Financial Group's 2004 acquisition of Charter One Financial. The information netted the participants more than $750,000 according to The Boston Globe.
According to the SEC, Shengnan Wang, who then worked at Citizens Financial, was able to deduce from several due-diligence documents that the bank was looking to acquire Charter One. She and her husband, Hai Liu, then bought shares of Charter One just before the acquisition was announced on May 4, 2004. In addition, the husband and wife also invested $60,000 in a hedge fund managed by Michael Tom, a former Citizens Financial employee, and tipped Tom off on the plan.
The hedge fund manager then bought call options in Charter One, which increased in value after the acquisition was announced. Tom and Wang's husband also tipped off their brothers.
According to a statement by Citizens, Wang and Tom no longer work for the company and the group intends to cooperate fully with authorities.