Feb. 6–A federal jury on Thursday convicted former Chicago options trader Edward Thomas Jung on 10 counts of wire and securities fraud for bilking dozens of investors out of more than $21 million.
Jung’s wife, Diane Juergens, fell to her knees and exclaimed, “Oh, my God!” when prosecutors sought to have her husband’s bond raised to $100,000 after the conviction.
Jung, who had been free on his own recognizance since he was charged a year ago, “has every reason to flee,” Assistant U.S. Atty. Edward Kohler told the judge.
Jung remained free, but U.S. District Judge Joan Humphrey Lefkow raised bond to $100,000, secured by Jung’s million-dollar home in Lincoln Park.
After a three-week trial, the jury deliberated little more than three hours before convicting Jung on all counts.
According to Kohler and co-prosecutor M. David Weisman, Jung, 58, a former model, faces up to eight years in prison. The judge set sentencing for June 4 in U.S. District Court.
With a seat on the Chicago Board Options Exchange, Jung enticed about 60 people from around the country to invest millions of dollars in a hedge fund called Strategic Income Fund while promising to follow a conservative options trading strategy, the prosecutors said.
Jung falsely told investors that their pledged stocks and bonds would be used solely to conduct stock options trading on their behalf, they said.
Instead, Jung used the money to fund his own options trading and to pay his business expenses, including lease fees for his CBOE seat, prosecutors said.
He piled up huge trading losses between 1994 and 1998.
The government also alleged that Jung misrepresented his trading performance to prospective investors by inflating the success of his trading for the fund and failing to disclose his misappropriations.
According to court records, Jung told one investor who gave him $300,000 that no more than 5 percent of the money would be at risk. The investor lost the entire amount.
In seeking the higher bond, Kohler said Jung had filed for bankruptcy yet was still able to afford private attorneys to represent him at trial.
Investors, though, “haven’t gotten dime one,” Kohler told the judge.
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(c) 2004, Chicago Tribune. Distributed by Knight Ridder/Tribune Business News.
