Four face insider trading charges

A former credit analyst for Citizens Financial Group Inc. and her husband were among four people charged yesterday with illegally trading on inside information about the bank's 2004 acquisition of Charter One Financial in a scheme that allegedly netted participants more than $750,000 in profits.

The Securities and Exchange Commission said Shengnan Wang, 28, of Natick learned late last April of Citizens' planned offer for Charter One and tipped off a former Citizens colleague, Michael Tom, 36, who managed a hedge fund in Burlington in which Wang and her husband had invested $60,000.

The SEC said Wang secretly obtained information from the papers of colleagues who were conducting due diligence of a company Citizens was seeking to acquire. She was able to deduce that it was one of several banks in the Cleveland area, including Charter One. She then told Tom, who had helped her get a job at Citizens in November 2003, the SEC said.

Tom allegedly then bought call options in Charter One, which increased in value after Citizens revealed the acquisition on May 4. Tom, and Wang's husband, Hai Liu, each allegedly tipped off their brothers, who then traded in Charter One Securities, the SEC said. Wang and Liu were also charged by the US attorney in Boston yesterday with one count each of securities fraud.

In a statement yesterday, Citizens said it cooperated with authorities. Wang and Tom no longer work for the company, the statement said. Citizens said it expects its employees to observe confidentiality rules.

The SEC is seeking a return of the profits the group earned from trading in Charter One stock, including about $200,000 in the hedge fund run by Tom, GTC Growth Fund LP.

Tom's attorney, Mark Pearlstein, said his client ''anticipates addressing the allegations in court." Liu's attorney declined to comment, and Wang's did not return a phone call seeking comment.

Andrew Caffrey can be reached at caffrey@globe.com.