Indian-American’s tipster convicted of insider tradingJune 21st, 2011 - 10:56 am ICT by IANS
New York, June 21 (IANS) A former expert-network consultant, who allegedly leaked information to an Indian-American hedge fund manager, has been found guilty of insider trading.
The conviction of Winfred Jiau Monday is the latest development in an ongoing investigation into insider trading by the US Attorney’s office in Manhattan, which has resulted in over 40 convictions of hedge fund managers and others since August 2009.
According to the prosecution, Jiau had conversations with Indian-American Samir Barai and Noah Freeman, two hedge fund managers who pleaded guilty to insider trading in February, in which she leaked information on a quarterly statement from Marvel Technology Group in 2008.
Barai then used that information, which Jiau allegedly obtained from an employee at the media firm, to make $820,000 in illicit gains by trading the company’s stock, CNN reported.
In addition to Marvel, Jiau is also accused of selling inside tips on semiconductor company Nvidia Corp.
During the two-week trial, prosecutors played recordings of phone calls between Jiau and her co-conspirators in which she discussed inside information on companies using code words such as “recipes,” “cooks” and “sugar.”
Prosecutors said Jiau, 43, obtained inside information on publicly traded companies from 2006 to 2008 as an employee of an expert networking firm, which is a business that helps connect investors with consultants who have knowledge of specific companies.
She then shared that information with hedge fund traders who used it to make trades in the stock market. In exchange, Jiau was paid more than $200,000 over the two-year period, according to prosecutors.
“Wini Jiau gave new meaning to the concept of social networking,” said Preet Bharara, the Manhattan US Attorney, in a statement. “She used and exploited friends at public companies for the purpose of obtaining, and then selling, inside information.”
Jiau’s attorney, Joanna Hendon, was quoted as saying she plans to appeal the conviction. “We’re disappointed in the verdict and look forward to appealing it after sentencing,” said Hendon.
Jiau, who was convicted on one count of securities fraud and one count of conspiracy, could face up to 20 years in prison and a maximum fine of $5 million. She is scheduled to be sentenced in September and remains in custody.
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