July 12, 2011 > Ex-employee pleads guilty to insider trading in NY
Ex-employee pleads guilty to insider trading in NY
By Larry Neumeister, Associated Press
NEW YORK (AP), Jul 05 - A former Flextronics International executive pleaded guilty Tuesday to insider trading charges, admitting that he passed along secrets to hedge fund managers before his December arrest in a government crackdown on expert networking firm consultants who help others cheat in the stock market.
Walter Shimoon, 39, of San Diego, entered the plea in a deal that calls for prosecutors to recommend leniency if he fully cooperates. The former senior director of business development at Flextronics became the 12th defendant convicted in the probe that was revealed last fall.
Shimoon admitted accepting a total of $45,000 from two expert networking firms to provide information to hedge funds and others between 2008 and 2010.
The Securities and Exchange Commission has said in court papers that Shimoon and three other consultants working for networking firm Primary Global Research provided secrets that enabled traders to reap profits or avoid losses totaling at least $5.9 million. The SEC said Shimoon spoke with representatives of at least 11 different hedge funds from December 2008 to January 2010, providing tips about Flextronics and a supplier, Omnivision Technologies Inc.
Shimoon told U.S. District Judge Jed Rakoff that he was privy to confidential information in his position at Flextronics and was able to relay some of those secrets in return for a $200-an-hour consulting fee.
``I knew they were using information I provided to make decisions on buying and selling securities,'' he said.
The two conspiracy counts and one count of securities fraud to which Shimoon pleaded carry potential prison terms of up to 30 years. Sentencing was scheduled for July 8, 2013, leaving Shimoon plenty of time to cooperate as the government continues widening its assault on Wall Street corruption.
The probe into expert networking firms grew out of an investigation into hedge fund insider trading that U.S. Attorney Preet Bharara has said was the biggest in history. That case has resulted in more than two dozen convictions, including one-time billionaire Raj Rajaratnam, who awaits sentencing.
The government said in court papers that Shimoon had a business relationship with Apple while at Flextronics because Flextronics supplied electronic components to Apple, including specifically-engineered camera and charger components for the iPhone and iPod.
Among the secrets he possessed were details about information and forecasts concerning Apple purchase or shipping orders regarding Flextronics components and about alternative supplies of Apple products, the government said.