Insider trading case involving Primary Global Research widens
The U.S. Securities and Exchange Commission said Thursday it has charged six former consultants and employees of California expert network firm Primary Global Research with insider trading.
The charges are the first brought by the agency in the U.S. government’s major investigation into insider trading at hedge funds.
In a civil complaint filed in U.S. district court in Manhattan, the SEC alleged that technology company employees Mark Anthony Longoria, Daniel Devore, Winifred Jiau and Walter Shimoon profited from their inside knowledge of companies like Advanced Micro Devices Inc., Apple Inc., Dell Inc., Flextronics International Ltd. and Marvell Technology Group Ltd. by leaking confidential information to Primary Global’s investor clients.
It also charged two Primary Global employees, Bob Nguyen and James Fleishman, with facilitating the transfer of information.
Hedge funds and other investors who traded off those tips generated nearly $6 million in illicit gains, the SEC said.
Jiau, Shimoon, Longoria and Fleishman had previously been arrested and charged by prosecutors in New York in the case. Devore and Nguyen have pleaded guilty to taking part in the insider trading.
The SEC said its investigation of expert networks is ongoing. Expert network firms specialize in matching hedge funds and other investors with industry experts for research and consulting advice.
“While it’s legal to obtain expert advice and analysis through expert networking arrangements, it’s illegal to trade on material nonpublic information obtained in violation of a duty to keep that information confidential,” the SEC said in a statement.
A Primary Global spokesman declined to comment on the new charges.
Since late last year, eight people have been criminally charged in the government’s insider trading probe. The SEC did not name former Primary Global employee Don Ching Trang Chu or Taiwan Semiconductor Manufacturing Co. manager Manosha Karunatilaka in its complaint Thursday. The two were among the eight charged in the insider trading probe.
