NEW YORK – A California man who worked for a semiconductor company was arrested on insider trading charges Wednesday in a probe of expert networking firms that help funnel inside information to hedge funds.
Stanley Ng was arrested at his home in Cupertino, Calif. He was charged with one count of conspiracy to commit securities fraud and wire fraud.
Authorities say Ng worked since 2002 at Santa Clara, Calif.-based Marvell Technology Group Ltd. as its manager responsible for ensuring federal securities laws were followed. They said he reported information to the Securities and Exchange Commission.
"Incredibly, the person designated the 'SEC Reporting Manager' for Marvell was allegedly using his special access to non-public information to violate the very federal securities laws he was supposed to be assuring compliance with," U.S. Attorney Preet Bharara said in a statement.
Ng and his co-conspirators, Bharara said, "traded inside information as casually as some people trade baseball cards."
Marvell was not accused of any crime. A message left with Ng's lawyer on Wednesday was not immediately returned.
Ng was accused in court papers of providing inside information to Winifred Jiau, who was convicted in June of conspiracy to commit securities fraud and wire fraud. Her trial was one of the first to result from a government crackdown of Wall Street middlemen suspected of peddling inside information as if it were legitimate research.
Jiau, of Fremont, Calif., was among 13 people arrested last year on charges that she conspired to accept cash and gifts to feed inside information to hedge funds. Most of the other defendants have pleaded guilty. Jiau is awaiting sentencing.
Jiau worked for two years as a consultant for Primary Global Research, a Mountain View, Calif.-based company.
A criminal complaint filed in federal court in Manhattan said Ng was recruited to join an "investment club" with Jiau and agreed to provide inside information regarding Marvell. Authorities said Ng provided detailed, secret information about Marvell's financial results in May and August 2008.
Authorities said Jiau sold the information to portfolio managers at hedge funds. A defense attorney argued that a hedge fund manager-turned-cooperator made his trades based on research supplied by high-priced analysts rather than anything provided by Jiau.