A former technology consultant was convicted of insider trading charges Monday in the first trial stemming from a wide-ranging government probe of expert network firms.
The verdict by the 12-member jury, in its second day of deliberations, is the latest victory for federal prosecutors as they seek to crack down on insider trading in corporate America.
Winifred Jiau, a former consultant for California expert network firm Primary Global Research, was convicted of conspiracy and securities fraud. Sentencing is set for Sept. 21.
Jiau, 43, faces up to 20 years in prison on the securities fraud count and a possible five years on the conspiracy charge.
Federal prosecutors in Manhattan alleged that Jiau befriended company insiders and persuaded them to give her confidential financial information, which she passed along to hedge fund managers. Expert network firms link company insiders or industry experts with investors for a fee.
“It was a very difficult decision,” said Susan Kohlmeyer, the jury foreperson.
Joanna Hendon, her lawyer, said her client will appeal the verdict. Jiau remained in custody on Monday.
Her conviction came about a week after three hedge fund traders were convicted of fraud and conspiracy in a separate insider trading probe involving Galleon Group. Galleon founder Raj Rajaratnam was convicted of insider trading charges in a separate trial last month.
The US Attorney’s office in Manhattan has multiple insider trading investigations ongoing. In the past 18 months, 49 hedge fund managers and others have been charged with insider trading; 44 have been convicted or pleaded guilty.
Prosecutors alleged that Jiau formed friendships with company insiders, including Sonny Nguyen, a former senior financial analyst at Nvidia Corp. She gave them gifts, including live lobsters and an iPhone to Nguyen, and took them to lunch, prosecutors said.
Jiau eventually suggested to Nguyen that they form a “club” to trade stock tips in exchange for nonpublic information, prosecutors said. Nguyen, who testified at trial, has pleaded guilty to criminal charges.
The information she got from her sources inside Nvidia and Marvell Technology Group Ltd. was so valuable and accurate — “to the decimal point,” one prosecutor said — that her hedge fund clients paid Jiau a monthly fee as high as $10,000 a month, prosecutors said.
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