New York (HedgeCo.net) – Walter Shimoon pled guilty yesterday to two counts of conspiracy to commit securities fraud and wire fraud and one count of securities fraud.
CNN Money says:
Shimoon, a fomer director at Flextronics, a Singapore-based company that supplies Apple with camera and battery components, was being paid up to $200 per hour to leak insider information to a shadowy group of hedge funds and so-called expert networks.
Reuters says:
Kingdom Ridge Capital, founded in 2008 by two former SAC Capital Advisors LP employees, had under $350 million invested in U.S. equities according to a recent regulatory filing.
In the ongoing investigation, a number of former SAC traders and analysts have either been implicated or investigated but no charges have been filed against SAC Capital’s founder, the billionaire trader Steven Cohen or any other SAC employees. Shimoon in court also admitted to being paid $27,500 by independent research firm Broadband Research.
Bloombery says:
Shimoon was arrested in December with three other defendants. Also charged with Shimoon were former Primary Global executive James Fleishman; Mark Anthony Longoria, who worked at Advanced Micro Devices Inc; and Manosha Karunatilaka, a former account manager at Taiwan Semiconductor Manufacturing Co. Longoria and Karunatilaka have pleaded guilty. Fleishman is scheduled to be tried next month on two counts of conspiracy.
In a parallel lawsuit, the U.S. Securities and Exchange Commission alleged Shimoon spoke with people from at least 11 hedge funds over 14 months and leaked stock tips to some of them. Winifred Jiau, a former Primary Global consultant, was convicted of securities fraud and conspiracy June 20 in Manhattan federal court.
In an Oct. 1, 2009 phone call secretly taped by the FBI, he gave his contact at a New York-based hedge fund called Kingdom Ridge Capital some third quarter iPhone sales figures that wouldn’t be released for another two and a half weeks.
CNN Money released the FBI wiretaps:
The iPhone 4: Apple, he told his contact, was “coming out next year” with a new iPhone that’s “gonna have two cameras … It’ll be a neat phone because it’s gonna have a five-megapixel auto-focus camera and it will have a VGA forward-facing videoconferencing camera.” Apple announced the iPhone 4 — with its two cameras — eight months later.
The iPad: “They [Apple] have a code name for something new … It’s … It’s totally … It’s a new category altogether… It doesn’t have a camera, what I figured out. So I speculated that it’s probably a reader. … Something like that. Um, let me tell you, it’s a very secretive program … It’s called K, K48. That’s the internal name. So, you can get, at Apple you can get fired for saying K48.” The iPad — code named K48 — was unveiled four months later.
According to Reuters, court documents unsealed Tuesday showed a New York-based hedge fund called Kingdom Ridge Capital made $560,000 in profits in October 2009 trading on secrets provided by Walter Shimoon. Sentencing is scheduled for July 8, 2013. He faces up to 30 years in prison.
Shimoon is the 13th of 14 charged with insider trading in what Manhattan U.S. Attorney Preet Bharara has described as “a corrupt network of insiders” serving as consultants “who sold out their employers by stealing and then peddling their valuable inside information.”
Alex Akesson
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