A Sri Lankan, Manosha Karunatilaka is among five traders arrested in the United States on charges they leaked confidential corporate information last Thursday.
He is an account manager at the Taiwan semiconductor manufacturing company in Los Angeles, newspaper reports from the USA said.
The four people arrested on Thursday were Walter Shimoon, a senior director of business development at Flextronics in San Diego; Mark Longoria, a supply chain manager at Advanced Micro Devices in Texas; Manosha Karunatilaka, an account manager at the Taiwan Semiconductor Manufacturing Company; and James Fleishman, a vice president and sales manager at Primary Global Research.Mr. Karunatilaka offered information on forecast demand from customers of Taiwan Semiconductor, the complaint says.
“You can kind of estimate what will be the shipping, you know, based upon that,” he told a witness, according to the complaint.The charges are the latest brought by the government in its rapidly expanding investigation into insider trading on Wall Street. A fourth employee pleaded guilty and is cooperating with investigators.
The four are accused of tipping off hedge funds and others with non-public information on sales figures for companies like Dell and Advanced Micro Devices, as well as providing details about new products like the Apple iPhone.
The authorities also arrested an executive at an expert-network firm that served as the matchmaker between the technology industry employees and hedge fund traders. The firm, Primary Global Research of Mountain View, California hired the employees as consultants and arranged calls between them and the traders, prosecutors say. The employees were paid more than $400,000 combined for their services.
Investigators have been homing in on expert-network firms, which have emerged over the last decade as the research departments of large Wall Street banks have retrenched. A major reason for their growth is Regulation Fair Disclosure, a decade-old Securities and Exchange Commission rule that requires publicly traded companies to disclose material information to all investors at the same time.
“The information trafficked by the four ‘consultants’ went way beyond permissible market research,” said Janice K. Fedarcyk, head of the FBI’s New York office. “It was insider information.”
The charges on Thursday are an outgrowth of a sprawling insider trading case built around the prosecution of Raj Rajaratnam, a billionaire hedge fund manager and co-founder of the Galleon Group. The Justice Department has charged 23 people related to that case, 14 of whom have pleaded guilty.
The latest charges, filed on Thursday in the Southern District of New York, similarly relied on a wide-ranging patchwork of sources, including five cooperating witnesses, recorded conversations, and e-mail records and tapped phones.