INSIDER TRADING ARREST OF WOMAN IN USA

California woman arrested

in insider trading case

By Jonathan Stempel and Emily Chasan

NEW YORK | Wed Dec 29, 2010 6:05pm EST

NEW YORK (Reuters) – U.S. prosecutors on Wednesday charged a California woman with leaking secrets about technology companies to two hedge funds in exchange for illegal payments, expanding their probe into insider trading.

Winifred Jiau is at least the sixth person arrested since U.S. authorities raided three hedge funds last month, ratcheting up the pressure on the industry in their more than two-year-old probe.

Primary Global Research LLC, an “expert network” firm that linked investors such as hedge funds with industry experts, in a statement said it used Jiau as a consultant from September 2006 to December 2008, when “the relationship was ended.”

The period roughly corresponds with the time frame in which prosecutors said Jiau’s alleged illegal activity took place.

Jiau’s lawyer was not immediately available to comment.

Prosecutors accused Jiau, 43, of selling inside information about publicly traded companies including computer chipmakers Marvell Technology Group Ltd and Nvidia Corp to hedge funds, including the founder of a New York fund that prosecutors did not identify.

They said the information was sold through an expert network firm, in exchange for more than $200,000 of payments funneled through that firm, also not identified.

Nvidia spokesman Hector Marinez said Jiau had been a contractor at Nvidia before leaving about a year ago. Marvell did not return a request for comment.

Hedge funds pay expert network firms for access to experts who are supposed to offer insights on industry trends.

DETAINED

Jiau was charged with one count of securities fraud and one count of conspiracy, and could face 20 years in prison on the securities fraud charge, according to U.S. Attorney Preet Bharara for the Southern District of New York.

The defendant was arrested at her Fremont, California, home on Tuesday, and ordered detained by U.S. Magistrate Judge Nandor Vadas at a hearing Wednesday in San Francisco.

A bail hearing is set for January 3. It is unclear whether Jiau’s case will eventually be transferred to New York.

Jiau’s arrest follows criminal charges on December 16 against three technology company executives who allegedly sold secrets about companies including Apple Inc and chipmaker Advanced Micro Devices Inc.

Also charged on that date was James Fleishman, a salesman at Primary Global, which had used the executives as consultants.

Sourced & published by Henry Sapiecha

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