Hyung Lim, a former Altera executive, pleaded guilty to conspiracy to commit securities and wire fraud before U.S. District Judge Sullivan in Manhattan. The charges involved his relaying tips about Altera and Nvidia Corp. to fund managers who are accused of operating an insider trading ring.
Lim is cooperating with the U.S. government, and is set to testify against the fund managers in the fall of 2012. The fund managers come from different investment and management companies.
The charges against the fund managers were announced in January, 2012, and federal authorities described the insider-trading ring as the largest one ever seen involving one stock.
The former executive told the judge that he received information regarding Nvidia from an unnamed friend who worked in the accounting department at the computer hardware company. He then passed the Nvidia information to former investment adviser Danny Kuo, who worked at Whittier Trust Co.
Lim said he received the insider information about Nvidia from the unnamed friend at his request. He did so, knowing that Kuo was after the information to help others trade Nvidia stock. In exchange for the information given to Kuo, Lim received cash, items of value and insider information for other publicly traded technology companies.
The Securities and Exchange Commission (SEC) alleges that Kuo also used the information he received to benefit his own hedge fund. The SEC also alleges that Kuo's fund avoided or earned trading losses of $90,000 or more.
The SEC said that Kuo and Lim became friends after attending poker parties that were put together by a mutual friend. Kuo compensated Lim for the Nvidia insider information with nonpublic information about other publicly traded information companies, and paid for Lim's gambling debts.
Lim is facing up to 25 years in prison for pleading guilty to the charges against him. He has yet to be sentenced, and is free on bond.
Source: Bloomberg, "Ex-Altera Executive Pleads Guilty To Passing Insider Tips," Patricia Hurtado, September 4, 2012
Our firm handles similar situations to the ones mentioned in this article. For more information, please visit our Securities Fraud: What You Need to Know as an Investor page.
