NEWS17 December 2010

Tech consultants arrested on allegations of trading inside information

Legal North America

US— The FBI has arrested a vice president at an investment research and market intelligence agency and four people working at technology firms for allegedly conspiring to distribute information that went “way beyond permissible market research”.

Advanced Micro Devices’ Mark Longoria, Flextronics International’s Walter Shimoon and Taiwan Semiconductor Manufacturing Company’s Manosha Karunatilaka were all paid to serve as ‘consultants’ at Primary Global Research (PGR), and have been arrested along with PGR’s vice president of sales James Fleishman.

It is alleged that the quartet, who in their roles as consultants would speak to PGR clients to provide market, issues and trends intelligence, divulged confidential and inside information in phonecalls arranged by Fleishman.

Manhattan US Attorney Preet Bharara claimed the four “sold out their employers by stealing and then peddling their valuable inside information”. A fifth man working as consultant for the agency, Dell’s Daniel Devore, pleaded guilty to wire fraud and conspiracy to commit wire fraud and securities fraud earlier this month.

FBI assistant director-in-charge Janice Fedarcyk said: “The information trafficked by the four ‘consultants’ went way beyond permissible market research; it was insider information. And the fifth defendant was directly involved in the transfer of inside information from the consultants to hedge funds and other end users.”

“This wasn’t market research,” Fedarcky added. “What the defendants did was purchase and sell insider information. Our investigation is most assuredly continuing.”

In a statement to PGR said that Fleishman has been “placed on leave” and that its relationship with Shimoon and Longeria ended earlier this year.


1 Comment

14 years ago

Here's where the term "market research" becomes confusing for the layman. In the US, "market research" is typically reserved for desk research and research into financial markets, while "marketing research" typically refers to primary quantitative or qualitative research conducted primarily by marketing research consultancies and practitioners.

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