Federal authorities in New York have accused five former and high-ranking employees of large technology companies of insider trading, fraud and conspiracy. According to prosecutors, the defendants released confidential information for a fee about the companies they worked for as well as about other technology firms.
The five include Mark Anthony Longoria, former supply chain manager at AMD; Daniel Devore, an ex global supply manager at Dell; Walter Shimoon, a former senior director of business development at Flextronics; Manosha Karunatilaka, a former account manager at TSMC; and James Fleishman, a sales manager for the expert-networking firm that organized the process of information sharing.
The department of justice (DOJ) claims that the figurants of its investigation provided confidential information to an "expert-networking" firm, which then provided it to its clients, such as hedge funds. The former global supply manager for Dell, who worked as a consultant for the firm, previously pled guilty on December 10, 2010, to an information charging him with wire fraud and conspiracy to commit wire fraud and securities fraud.
"Today’s charges allege that a corrupt network of insiders at some of the world’s leading technology companies served as so-called 'consultants' who sold out their employers by stealing and then peddling their valuable inside information. The detailed allegations in the Complaint, along with the guilty plea unsealed today, describe criminal conduct that went well beyond any legitimate information-sharing or good faith business practice. Over the next many months and beyond, we will continue to enforce the law, police the market, and protect honest businesses andtheir shareholders by working methodically with the FBI and SEC to root out corporate corruption and insider trading," said Preet Bharara, Manhattan U.S. Attorney.
According to FBI assistant director-in-charge Janice K. Fedarcyk, the information trafficked by the four "consultants" went way beyond permissible market research as it was generally insider information.
"The fifth defendant was directly involved in the transfer of inside information from the consultants to hedge funds and other end users. The more than $400 000 the firm paid the four 'consultants,' merely to participate in phone calls withfirm clients, is an indication of the value placed on the information. This wasn't market research. What the defendants did was purchase and sell insider information," said Janice K Fedarcyk.