Lexington Man Indicted For Insider Trading

LEXINGTON, MA – A Lexington man was arrested Thursday and charged in federal court in Boston with profiting more than $800,000 from insider trading. Charlie Jinan Chen, 48, was indicted on three counts of securities fraud and one count of making a material false statement.

Authorities allege through Chen's personal relationship with a Lexington couple, one of whom worked for VistaPrint's Financial Planning and Analysis department, he received information on the company's quarterly earnings reports before it went public. He then allegedly engaged in risky "put and call" option trading, during which he correctly predicted the direction of the change in VistaPrint stock price following the earnings announcements, the U.S. Attorney's office said.

Authorities believe this took place between July 2012 and July 2014. In the final two quarters of 2014, Chen allegedly profited more than $800,000.

Chen is also accused of lying to federal agents by claiming he could not recall his option trading in VistaPrint, despite it being the largest position he had taken in any stock and it netting him over $800,000 in three months. He allegedly used a portion of his profits to buy a condominium in Stoneham, authorities said.

The indictment also alleges that Chen downplayed his relationship with the couple by claiming the spouse of the former VistaPrint employee was more of an acquaintance than a friend. Investigators found a history of Chen's family and the VistaPrint employee's family socializing together and vacationing together in Hawaii and Europe, according to the USAO.

The charge of securities fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of up to $250,000. The charge of making a materially false statement provides for a sentence of no greater than five years in prison, one year of supervised release and fine of up to $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.

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