Investor Accused of Insider Trading of Meridian Shares
California venture capital investor Keith Joon Kim was criminally charged with insider trading in Meridian Data Inc. shares based on information he gleaned from a club for company presidents, federal authorities said Monday.
In separate cases, federal prosecutors and the Securities and Exchange Commission alleged Kim learned about negotiations by Quantum Corp. to acquire Meridian in March 1999, when Kim was on a private plane heading to a Colorado retreat for members of the Young Presidents’ Organization, a group for company presidents younger than 50.
The retreat’s moderator announced on the flight that Meridian’s then-chief executive couldn’t attend because of merger talks with disk-drive maker Quantum, according to the civil and criminal cases filed in a San Francisco federal court. Kim, an officer of Oakland venture capital firm Brainrush Inc., made more than $830,000 by purchasing Meridian stock, the government charges. The stock more than doubled after the acquisition was announced on May 11, 1999.
Kim’s lawyer couldn’t be reached for comment. Kim was arrested Monday at his Oakland home and released on a $400,000 secured bond, prosecutors said.
The SEC also filed separate civil charges against Brainrush President and Chief Investment Officer Douglas Park and Park’s brother William for allegedly using the same insider information to buy Meridian shares before the deal’s announcement.