Federal prosecutors in New York issued sweeping charges Thursday accusing former executives of AMD, Dell, Flextronics, and Taiwan Semiconductor Manufacturing Co. with divulging inside information for a fee about their companies as well about Apple, RIM and others.
The U.S. Attorney for the Southern District of New York said in a statement that five people had either been arrested or pleaded guilty, and that the investigation is continuing.
The five suspects, including a consultant from an unnamed "expert-networking firm," allegedly received confidential insider information that was then used to execute stock trades.
According to the government complaint, four of the defendants are accused of one count of conspiracy to commit securities fraud and four counts of conspiracy to commit wire fraud.
The four include Walter Shimoon, a former senior director of business development at Flextronics; Mark Anthony Longoria, former supply chain manager at AMD; Manosha Karunatilaka, a former account manager at TSMC; and James Fleishman, a sales manager for the expert-networking firm.
The fifth person charged in the case is Daniel Devore, former global supply manager at Dell, who was arrested earlier and pleaded guilty on December 10 to wire fraud and conspiracy to commit wire fraud and securities fraud.
Five other people involved with these companies have either plead guilty or are still under investigation, and acted as cooperating witnesses in the FBI's investigation of the insider trading.
According to the complaint, the expert networking firm, labeled as the "Firm," advertised itself as an "independent investment research firm that provides institutional money managers and analysts with market intelligence" through a "Global Advisory Team of Experts." The Firm claimed to speak one-on-one with clients to get up-to-the-minute intelligence on factors affecting a company, product, or industry.
The Firm allegedly received payments for its services in both cash and in funds generated by trading activity, the FBI alleged in the complaint.
According to the FBI in the complaint, Longoria on July 21, 2009 provided the Firm with information about revenue numbers, average sales prices, unit sales for different products, and revenue forecasts for AMD about an hour before the close of the stock market that day.
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