Charlie Jinan Chen, 48, was charged in federal court in Boston, Massachusetts, in connection with insider trading. Specifically, trading on non-public information and profiting more than $800,000, over the course of three months. The trading scheme involved VistaPrint, a Cimpres company, focused on providing high-quality, custom-printed products to small and medium sized businesses.
Illegal insider trading “refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security,” according to the SEC.
The indictment alleges Chen leveraged his close personal relationship with a former VistaPrint employee that worked in the Financial Planning and Analysis department. What’s more, Charlie Chen obtained earnings data and acted on the information before it was public domain. With this purpose in mind, Chen utilized the non-public information and engaged in options trading (“put and call” options), to correctly anticipate the direction of VistaPrint’s underlying stock price. The most compelling evidence was that Chen had his largest position in VistaPrint stock. Not only that, Chen claimed the VistaPrint employee was merely an acquaintance. In reality, the individual was a very close family friend and they enjoyed family vacations to exotic tropical destinations.