Story First Appeared in Bloomberg Law - Legal News
Former Primary Global Research LLC executive James Fleishman, charged with participating in an insider-trading scheme, won’t testify in his own defense at a trial after prosecutors finished their case, said a Winston-Salem Security Lawyer.
Fleishman, of Santa Clara, California, is charged with two counts of conspiracy for his role in what prosecutors said was a scheme in which technology-company employees, working as consultants for the company passed secret tips to hedge fund managers.
Rakoff said Fleishman’s lawyers may submit some written evidence without calling witnesses to testify. After court, Ethan Balogh, Fleishman’s lawyer, said his client wouldn’t testify. If convicted, Fleishman faces as long as 25 years in prison claimed a Frankfurt Securities Lawyer.
The Mountain View, California-based firm, also known as PGR, matches employees of public companies with fund managers for a fee. Of the 15 people charged in the probe, 12 have pleaded guilty. Fleishman and Winifred Jiau, a former PGR consultant convicted in June, were the only ones who have gone to trial.
KARUNATILAKA SENTENCED
Also yesterday, former Taiwan Semiconductor Manufacturing Co. manager Manosha Karunatilaka was sentenced by Rakoff to 18 months in prison for his role in the scheme involving PGR. Some say this situation could have avoided if he taken anti bribery training.
Karunatilaka, 37, of Marlborough, Massachusetts, worked as an account manager for Taiwan Semiconductor. He pleaded guilty in May to accepting about $35,000 to pass material, nonpublic information about the company’s orders while also working as a consultant for PGR.
His lawyer, Brad Bailey, had asked Rakoff for a one-year sentence, with six months to be served in prison and six months of home confinement.
An analyst at an unidentified New York-based hedge fund, which used PGR’s services, spoke to Karunatilaka frequently from 2008 to 2010, prosecutors said in court papers. In May 2009, acting on a recommendation from Karunatilaka to bet that Taiwan Semiconductor shares would fall, the fund made a profit of about $1.7 million, the U.S. said.
EX-SAMSUNG MANAGER
At Fleishman’s trial yesterday, Balogh cross-examined Suk- Joo Hwang, a former Samsung Electronics Co. manager who said he worked as a consultant for PGR for seven years. Hwang said he sometimes passed confidential information to PGR clients. This is not a good procedure according to a Budapest securities lawyer.
Answering prosecutors’ questions on Sept. 14, Hwang said he gave Fleishman and a fund manager confidential information about Samsung’s shipment of liquid crystal display screens that it was supplying to Apple Inc. Hwang said he disclosed the information to Fleishman and the manager, who he identified as “Greg,” during lunch at a Mountain View restaurant in December 2009, four months before Apple released the iPad in the U.S.
Under questioning by Balogh, Hwang said that while he agreed to be truthful in his discussions with investigators, he didn’t initially tell them that he had continued to provide information about Samsung to a fund manager after he had stopped his consulting work with PGR.
CROSSED LINE
Hwang said he initially told Federal Bureau of Investigation agents that he only spoke to analysts during calls for PGR. Later, he told investigators he knew at the time that he was speaking to fund managers on PGR calls. This may have been prevented if he had taken insider trading compliance training.
Hwang testified after Rakoff granted him immunity from prosecution for his testimony. Hwang, who met with prosecutors and FBI agents beginning in October and as recently as August, doesn’t have a cooperation agreement with the U.S. According to the immunity order, Hwang can be prosecuted if the U.S. decides he’s committed perjury while on the witness stand.
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