NEW YORK (By Emily Chasan) - The U.S. Securities and Exchange Commission said on Thursday it has charged six former consultants and employees of California expert network firm Primary Global Research with insider trading.
The charges are the first brought by the U.S. investor protection agency in the U.S. government's major investigation into insider trading at hedge funds.
In a complaint filed in U.S. federal court in Manhattan, the SEC claimed that technology company employees Mark Anthony Longoria, Daniel DeVore, Winifred Jiau and Walter Shimoon profited from their inside knowledge of companies like Advanced Micro Devices Inc, Apple Inc, Dell Inc , Flextronics International Ltd and Marvell Technology Group Ltd by leaking confidential information to Primary Global's investor clients. It also charged two Primary Global employees, Bob Nguyen and James Fleishman, with facilitating the transfer of information.
Hedge funds and other investors who traded off of those tips generated nearly $6 million in illicit gains, the SEC said.
Jiau, Shimoon, Longoria and Fleishman had previously been arrested and charged by prosecutors in New York in the case. DeVore and Nguyen have pleaded guilty to taking part in the insider trading.
The SEC said its investigation into the activities of expert networks is ongoing.
"While it's legal to obtain expert advice and analysis through expert networking arrangements, it's illegal to trade on material nonpublic information obtained in violation of a duty to keep that information confidential," the SEC said in a statement.
A Primary Global spokesman declined to comment on the new charges.
(Reporting by Emily Chasan)
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