SEC charges 6 for insider trading

By Marcy Gordon, AP

WASHINGTON–U.S. federal regulators on Thursday filed insider-trading charges against six people they say worked for an expert-networking firm and passed on confidential corporate information to investors. Expert networks connect analysts and experts with investors seeking information, for a fee. They are playing a growing role on Wall Street. The Securities and Exchange Commission (SEC) announced the civil charges against the six, accusing them of passing tips to hedge funds and other investors that enabled them to make about US$6 million in illegal profits. They had previously been named in criminal cases brought by federal prosecutors, as part of what authorities say is the biggest hedge fund insider-trading case in history. The SEC said four of the six were employees of technology companies who moonlighted as consultants and exploited their access to confidential information about Advanced Micro Devices Inc., Apple Inc., Dell Inc. and other companies. The six were consultants or employees of Primary Global Research, based in Mountain View, California, which connects experts and consultants with investors seeking information in the technology, health care and other industries. Prosecutors have portrayed the firm as an incubator for insider trading. Named by the SEC were Mark Anthony Longoria, Daniel DeVore, Winifred Jiau, Walter Shimoon, Bob Nguyen and James Fleishman. The U.S. attorney’s office in Manhattan announced that an indictment was returned Thursday against Fleishman on criminal charges of conspiracy to commit securities fraud and conspiracy to commit wire fraud. His attorney, Ethan Balogh, said “Mr. Fleishman is innocent of these charges, and we intend to contest them and establish his innocence at trial.” Balogh declined to comment on the SEC charges, saying he hadn’t yet seen the civil lawsuit. Nguyen and DeVore pleaded guilty to similar charges in federal court in Manhattan in recent months. The six Primary Global consultants and employees “schemed to facilitate widespread and repeated insider trading by several hedge funds and other investment professionals,” SEC Enforcement Director Robert Khuzami said in a statement. The SEC is seeking unspecified restitution and civil fines from the six; the agency also seeks to bar Longoria, DeVore and Shimoon from serving as officers or directors of any public company. Attorneys representing Longoria, DeVore, Jiau and Nguyen declined to comment Thursday. Shimoon’s lawyer didn’t return a telephone call seeking comment.