Fri, Dec 31, 2010 - Page 10 News List

California woman charged with fraud, conspiracy

Reuters, NEW YORK

A California woman has been arrested on charges of leaking secrets about technology companies to hedge funds, as federal prosecutors expand their probe into insider trading.

Winifred Jiau (焦婉盈), 43, was charged with one count of securities fraud and one count of conspiracy, US Attorney for the Southern District of New York Preet Bharara said.

Jiau faces up to 20 years in prison on the securities fraud charge. Her lawyer was not immediately available to comment.

Prosecutors said that from 2006 to 2008, Jiau leaked inside information, including earnings, about multiple publicly-traded companies, including Marvell Technology Group Ltd and Nvidia Corp to hedge funds, in exchange for more than US$200,000.

They said the payments were made through a Mountain View, California-based “expert network” firm that purported to offer “institutional money managers and analysts with market intelligence” services through a “global advisory team of experts.”

Prosecutors did not identify the firm, but that language is used in marketing materials for Primary Global Research, a Mountain View-based expert network firm.

On Dec. 16, prosecutors disclosed four other insider trading arrests, in an announcement focused on people hired as consultants to hedge funds by Primary Global.

Primary Global, Marvell and Nvidia did not immediately return requests for comment.

In the case of Marvell, prosecutors said Jiau provided two portfolio managers of separate hedge funds with accurate information about the company’s results for the quarter ended May 3, 2008, leading to more than US$820,000 of trading profits for one of the funds.

Prosecutors also said Jiau on Aug. 8, 2008, told the portfolio managers that Nvidia would post revenue of “892” for last year’s fiscal second quarter and announce a stock buyback. A few days later, Nvidia posted revenue of US$892.7 million and added US$1 billion to the buyback program, prosecutors said.

Jiau was arrested at her Fremont, California, home on Tuesday and was scheduled to be presented before a federal magistrate judge in that state on Wednesday, prosecutors said.

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