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US woman arrested in insider trade scheme

US woman arrested in insider trade scheme

A woman was arrested on securities fraud charges in an ongoing federal crackdown on people who illegally feed inside information about publicly held companies and pass it off as research, federal authorities announced Wednesday.
Winifred Jiau, 43, was arrested Tuesday at her Fremont, California, home and was held for a Wednesday appearance in federal court in San Francisco, according to a release from U.S. Attorney Preet Bharara in Manhattan. It was not immediately clear who would represent her in court.
Jiau was charged with securities fraud and conspiracy to commit securities fraud for accepting more than $200,000 over a two-year period from an expert networking firm that promises to provide "institutional money managers and analysts with market intelligence" through a "Global Advisory Team of Experts," Bharara said.
According to prosecutors, Jiau provided detailed financial earnings information about multiple publicly traded companies, including Marvell Technology Group Ltd. and Nvidia Corp.
He said she told two portfolio managers at separate hedge funds in May 2008 about Marvell's quarterly revenues, gross margins and earnings and did so again three months later, prior to the earnings statements.
Authorities said that during the conversations, several of which were recorded by one of the hedge fund managers, she made clear that she received the inside information from a Marvell employee.
As a result of the information, one of the hedge funds made more than $820,000 trading in Marvell securities, prosecutors said.
The latest arrest is part of a widening probe targeting those in the financial services industry who glean secrets from public companies and share them as research.
Several arrests earlier this month stemmed from information that came from Primary Global Research, a Mountain View, California-based firm that advertised consulting services to investors on industry trends, issues and regulations, authorities said.
Prosecutors several weeks ago charged an executive at the firm and three "expert consultants" with conspiracy.
The latest investigation grew from what Bharara last year described as the largest hedge fund insider trading case in history. That probe resulted in charges against 23 people, alleging that they enabled more than $50 million in illegal profits.
Arrests in that case included Sri Lanka-born Raj Rajaratam, a one-time billionaire hedge fund founder who has insisted that he only made trades based on publicly known information. He is free on $100 million bail while he awaits trial.
Bharara said investigators for the first time made extensive use of wiretaps in the insider trading probe, a tactic normally reserved for organized crime and drug investigations.


Updated : 2020-12-06 07:08 GMT+08:00