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4 More Arrests in Insider Trading Investigation, 22K Is All It Took For One Of Them

Don Chu’s old employer, Primary Global Research, saw four more of its own get arrested this morning in an insider trading scandal. Primary Global Research – Are you setting up your employees to save your ass? Did all this really happen under your radar?

Why Walter Shimoon chose to risk his freedom for a mere $22,000 with insider trading when there are so many other lucrative ways to cheat people is beyond us. But that’s all it took. The alleged small time crook and three others, Manosha Karunatilaka, Mark Longoria, and James Fleishman were arrested today by the F.B.I in an insider trading investigation it’s conducting with federal prosecutors in Manhattan. The four arrested are believed to have provided confidential information to investors.

Advanced Micro Devices, Inc. (NYSE:AMD)

Federal prosecutors also say Daniel Devore, a former global supply manager for Dell and who worked as a consultant for Primary Global, pleaded guilty last week to wire fraud and conspiracy charges. He is now cooperating with investigators.

Fleishman, 41, was a sales manager at Primary Global Research.  He was responsible for finding new clients and ensuring service to existing ones.  Federal prosecutors say Fleishman arranged for clients, including hedge funds, to speak with consultants knowing that consultants would provide confidential information, including inside information.

The consultants were Longoria, Shimoon and Karunatilaka.

Longoria, 44, was a supply chain manager at Advanced Micro Devices (AMD). He signed an employment agreement with AMD way back when that restricted the disclosure of AMD confidential information. One of his illegal actions, prosecutors say, took place during a July 2009 phone call (confirmed by cooperating witnesses) when Longoria divulged AMD revenue information, average sales prices, product sales figures and gross margin information. Between January 2008 and March 2010, Primary Global Research paid Longoria more than $200,000 for the consultation services.

Shimoon got about a tenth of that. The 39-year old was employed at Flextronics International (FLEX) as a Sr. Director of Business Development. He too signed an employment agreement that restricted disclosure of confidential information and prohibited any activity that competed with Flextronics’ business. Flextronics provides some components to Apple, and federal prosecutors say Shimoon provided confidential information, including inside information, in consultation calls with Primary Global Research clients. Between January 2008 and June 2010, Shimoon got more than $22,000 from Primary Global Research for the consultation services he provided.

Karunatilaka, 37, was an account manager at Taiwan Semiconductor Manufacturing Company. Karunatilaka signed an employment agreement that also restricted the disclosure of confidential information and prohibited any outside employment. Karunatilaka released inside information to Primary Global Research clients between January 2008 and June 2010 and he got more than $35,000 for that.

Manhattan U.S. Attorney Preet Bharara said today in a statement,  “Today’s charges allege that a corrupt network of insiders at some of the world’s leading technology companies served as so-called ‘consultants’ who sold out their employers by stealing and then peddling their valuable inside information. The detailed allegations in the Complaint, along with the guilty plea unsealed today, describe criminal conduct that went well beyond any legitimate information-sharing or good faith business practice.”

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