Feds Arrest 4 More in Insider Trading Sweep; Another Pleads Guilty

Today's busts mark latest arrests in expansive, ongoing probe

By Jonathan Dienst
|  Friday, Dec 17, 2010  |  Updated 1:04 PM EDT
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Feds Arrest 4 More in Insider Trading Sweep; Another Pleads Guilty

ASSOCIATED PRESS

FILE - In this March 8, 2010 file photograph, a sign for Wall Street is shown near the New York Stock Exchange. Some concerns within Apple and IBM's earnings reports drove stock futures slightly lower Tuesday, Oct. 19, 2010. (AP Photo/Mark Lennihan, file)

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Four Wall Street company insiders and consultants were arrested Thursday on charges of insider trading as a fifth man pleaded guilty to securities and wire fraud charges, officials said. 

The FBI arrests, made in Boston, Austin, Texas, San Diego, Calif., and Santa Clara, Calif., come after a Taiwanese networking executive was busted last month for allegedly giving earnings-related information to hedge fund clients and after billionaire hedge fund investor Raj Rajaratnam and nearly two dozen others colleagues were arrested in on charges of insider-trading.

The four men arrested today are identified as Mark Anthony Langoria; Walter Shimoon, Minoisha Karunatilaka and expert networking firm executive James Fleischman, investigators said.  All four face securities fraud and wire fraud charges.

Langoria, 44, of Round Rock, Texas was working at Advanced Micro Devices(AMD) as a supply chain manager.  Officials said he was paid over $200,000 for inside information.

Shimoon, 39 of San Diego, worked at Flextronics International in business development.  The firm does business with Apple.  He allegedly released shipping information about Apple product shipping orders in exchange for $35,000.   
 
Karunatilaka, 37 of Marlborough Mass worked for Taiwan Semiconductor Manufacturing Corp.  Investigators said he was paid over $35,000 for leaking insider informaiton.

Another fifth man, Daniel Devore, formerly of Dell Inc., pleaded guilty to wire and securities fraud charges. 

"The information trafficked by four 'consultants' went way beyond permissible market research," said FBI New York Director Jan Fedarcyk.  "It was insider information ... Our investigation is assuredly continuing."

The U.S. Attorney has in public statements said insider trading on Wall Street is rampant and had vowed a crackdown.  In this case, the 'consultants' allegedly obtained and sold inside information to hedge funds

In late November, the FBI searched three hedge funds in New York, Boston and Stamford in connection with an ongoing insider trading investigation. 

Thursday's arrests are just the latest criminal charges in connection with that probe.

While none of them happened in the New York area, the defendants are being prosecuted in New York where this insider trading case was started by local FBI agents three years ago, officials said. 

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