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S.E.C.'s Complaint in Primary Global Case

S.E.C.'s Complaint in Primary Global Case

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Published by DealBook
The Securities and Exchange Commission's lawsuit against six individuals in the Primary Global insider trading case.
The Securities and Exchange Commission's lawsuit against six individuals in the Primary Global insider trading case.

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Published by: DealBook on Feb 03, 2011
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02/03/2011

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George S. CanellosAttorney
for
PlaintiffSECURITIES
AND
EXCHANGE COMMISSION
New
York
Regional Office3
World
Financial
Center,
Suite 400New
York,
NY 10281-1022(212) 336-1100. UNITED STATES
DISTRICT COURT
SOUTHERN
DISTRICT
OF
NEW YORK
SECURITIES
AND
EXCHANGE COMMISSION,
Plaintiff,-against-
COMPLAINT
MARK
ANTHONY
LONGORIA,
DANIEL L. DEVORE,
JAMES
FLEISHMAN,
BOB NGUYEN,
WINIFRED
JIAU, .
andWALTER
SIDMOON,
ECFCASE
Defendants.Plaintiff Securities and Exchange Commission ("Commission"), for its Complaintagainst defendants Mark Anthony Longoria ("Longoria"), Daniel
L.
DeVore ("DeVore"),James Fleishman ("Fleishman"), Bob Nguyen ("Nguyen"), Winifred Jiau ("Jiau"), andWalter Shimoon ("Shimoon") (collectively, "Defendants"), alleges as follows:SUMMARY
1.
This case involves the tipping
of
material nonpublic information to hedgefunds and other investment
p r o f e s s i o n ~ l s
 
by six individuals affiliated with
a
so-called"expert network" firm, .Primary Global Research LLC ("PGR").
 
2. Longoria, DeVore, Jiau, and Shimoon were all employed
by
technologycompanies and also served as PGR consultants, or "experts," who used their access tomaterial nonpublic information regarding technology companies to facilitate widespreadand repeated insider trading by numerous hedge funds and other investmentprofessionals. Each obtained material nonpublic information about sales, earnings,
or
performance data, concerning various public companies,.and shared that insideinformation with hedge fund and other clients
of
PGR who traded on the information.Each also received cash compensation from PGR in return for providing the insideinformation.3.. Fleishman and Nguyen were PGR employees who facilitated the transfer
of
material nonpublic information from PGR consultants to PGR clients and, in certaininstances, acted as conduits by receiving material nonpublic information from PGRconsultants and passing that informationdirectly to PGR clients.4. The defendants obtained material nonpublic inside information about thesales, earnings and performance
of
numerous public companies, including AdvancedMicro Devices ("AMD"), Apple Inc. ("Apple"), Dell, Inc. ("Dell"), FlextronicsInternational Ltd. ("Flextronics"), Marvell Technology Group Ltd. ("Marvell"),Omnivision Technologies, Inc. ("Omnivision"), Research in Motion Ltd. ("RIM"),Seagate Technology PLC ("Seagate"), and Western Digital Corporation ("WesternDigital"), and shared that inside information with traders. Based on these tips, the tradersreaped profits, or avoided losses, totaling at least $5.9 million.2
 
NATURE OF
THE
PROCEEDINGS AND RELIEF SOUGHT
5.
The Commission brings this action pursuant to the authority conferredupon it by Section 20(b)
of
the Securities Act
of
1933 ("Securities Act") [15 U.S.C. §77t(b)] and Section 21(d)
ofthe
Securities Exchange Act
of
1934 ("Exchange Act") [15U.S.C
..
§
78u(d)]. The Commission seeks permanent injunctions against each
of
thedefendants, enjoining them from engaging in the transactions, acts, practices, and courses
of
business alleged in this Complaint, disgorgement
of
ill-gotten gains or losses avoidedfrom the unlawful insider trading activity set forth in this Complaint, togethetwithprejudgmentinterest,andcivilpenaltiespursuantto Section20(d)
of
theSecuritiesAct[15 U.S.C.
§
77t(d)] and Section 21(d)(3)
of
the Exchange Act [15 U.S.C.
§
78u(d)(3)].The Commission also brings this action pursuant to Section 21A
of
the Exchange Act
[15
U.S.C.
§
78u-l] for civil penalties against defendants under the Insider Trading andSecurities Fraud Enforcement Act
of
1988.
In
addition; pursuant to Section 20(e)
of
theSecurities Act [15 U.S.C.
§
77t(e)] and Section21 (d)(2)
ofthe
Exchange Act [15 U.S.C.
§
78u(d)(2)], the Commission seeks an order barring defendants Longoria, DeVore, andShimoon from acting as an officer or director
of
any issuer that has a class
of
securitiesregistered pursuant to Section
12
of
the Exchange Act [15 U.S.C.
§
781]
or that isrequired to file reports pursuant to Section 15(d)
of
the Exchange Act
[15
U.S.C. §78o(d)]. The Commission seeks any other relief the Court may deem appropriatepursuant to Section
21
(d)(5)
ofthe
Exchange Act [15 U.S.C.
§
78u(d)(5)].
JURISDICTION AND VENUE
6.
This Court has jurisdiction over this action pursuant to Sections 20(b),20(d), and 22(a)
ofthe
Securities Act [15 U.S.C.
§§
77t(b), 77t(d), and 77v(a)] and
3

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