UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK See ELLE H Ea ae UNITED STATES OF AMERICA INFORMATION MARK KURLAND, : 10 cr. Defendant He eee re ee eee gee ge COUNT ONE (Conspiracy to Commit Securities Fraud) The United States Attorney charges: Relevant Entities and Individuals 1. In or about 2008, New Castle Partners (*NCP*) operated as the equity hedge fund group of Bear Stearns Asset Management Inc. ("BSAM"). Following the March 2008 acquisition of BSAM’s parent company by JPMorgan Chase & Co. (“JPMorgan”), NCP operated as a hedge fund affiliated with JPMorgan. In or about January 2009, NCP ended its relationship with JPMorgan, and the Managing Directors of NCP formed a new hedge fund, New Castle Partners LP ("New Castle Partners”). NCP and New Castle Partners are referred to herein, collectively, as “New Castle.” 2. At all times relevant to this Information, MARK KURLAND, the defendant, served as a Senior Managing Director at New Castle. 3. At all times relevant to this Information, Danielle Chiesi (*chiesi”), a co-conspirator not named as a defendantherein, worked for New Castle either as an employee or consultant. The Insider Trading Scheme 4. From in or about mid-August 2008 through in or about January 2009, MARK KURLAND, the defendant, Danielle Chiesi, and others known and unknown, participated in a scheme to defraud by executing securities transactions based on material, nonpublic information (“Inside Information”) pertaining to Advanced Micro Devices, Inc. (‘AMD’), Akamai Technologies, Inc. (“Akamai”), and Sun Microsystems Inc. ("sun"), In furtherance of the conspiracy, Chiesi obtained Inside Information from sources at Akamai and International Business Machines Corp. (*IBM"). Chiesi provided that Inside Information to KURLAND with the understanding that KURLAND would cause accounts managed by New Castle to trade in securities on the basis of that information. Chiesi also Giscussed the Inside Information with KURLAND and then obtained KURLAND’s permission to trade in securities, through New Castle, on the basis of that Inside Information. 5. MARK KURLAND, the defendant, knew that the Inside Information Chiesi obtained from her sources at Akamai and IBM was obtained, in each such case, in breach of (a) the fiduciary and other duties of trust and confidence that these inside sources owed to their respective employers, their employers’ shareholders, and, in certain instances, a company with which the source's employer had entered into a confidentiality agreement; (b) theexpectations of confidentiality of the respective employers of the inside sources (or a company with which the employer had entered into a confidentiality agreement); and (c) the written policies regarding the use and safekeeping of confidential and material nonpublic information maintained by the respective employers of these sources. The Conspizacy 6. Prom in or about mid-August 2008 through in or about January 2009, in the Southern District of New York and elsewhere, MARK KURLAND, the defendant, Danielle Chiesi, and others known and unknown, unlawfully, willfully, and knowingly did combine, conspire, confederate and agree together and with each other to commit offenses against the United states, to wit, securities fraud, in violation of Title 15, United states code Sections 78j(b) and 78f£, and Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5-2. ff the Cons ac! 7. Tt was a part and an object of the conspiracy that MARK KURLAND, the defendant, Danielle Chiesi, and others known and unknown, unlawfully, willfully and knowingly, directly and indirectly, by the use of the means and instrumentalities of interstate commerce, and of the mails, and of the facilities of national securities exchanges, would and did use and employ, in connection with the purchase and sale of securities, manipulativeand deceptive devices and contrivances in violation of Title 17 Code of Federal Regulations, Section 240.10b-5 by: (a) employing devices, schemes and artifices to defraud; (b) making untrue statements of material fact and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (c) engaging in acts, practices and courses of business which operated and would operate as a fraud and deceit upon persons, all in violation of Title 15, United States Code, Sections 78j(b) and 78££, and Title 17, Code of Federal Regulations, Sections 240.10b- 5 and 240,10b5-2. Means and Methods of the Conspiracy 8. Among the means and methods by which MARK KURLAND, the defendant, Danielle Chiesi, and their co-conspirators would and did carry out the conspiracy were the following: a. Chiesi obtained Inside Information from sources at Akamai and IBM and provided that Inside Information to KURLAND with the understanding that KURLAND would trade in securities on the basis of that information or discussed the Inside Information with KURLAND and then obtained KURLAND's permission to trade in securities, through New Castle, on the basis of that Inside Information. KURLAND understood that the Inside Information was supplied in violation of fiduciary and other duties of trust and confidence owed by the inside sources totheir respective employers, the employers’ shareholders, and/or a company with which the employer had entered into a confidentiality agreement b. KURLAND and Chiesi caused New Castle to execute securities trades based on the Inside Information Overt Acts 9. In furtherance of the conspiracy and to effect the illegal object thereof, MARK KURLAND, the defendant, Danielle Chiesi, and their co-conspirators committed the following overt acts, among others, in the Southern District of New York and elsewhere: ; Qn,or about Saturday, January 24, 2009 Chiesi, while in New York, New York, received a call from her source at IBM. b. On or about Monday, January 26, 2009, KURLAND approved the purchase of approximately 283,600 shares of Sun at a price of approximately $3.80 per share using certain accounts affiliated with New Castle. (Title 18, United States Code, Section 371.)COUNT TWO (Securities Fraud) The United States Attorney further charges: 10. The allegations contained in paragraphs 1-5 and 8- 9 are repeated and realleged as though fully set forth herein 11. n or about September 30, 2008, in the Southern District of New York and elsewhere, MARK KURLAND, the defendant, unlawfully, willfully and knowingly, directly and indirectly, by the use of the means and instrumentalities of interstate commerce, and of the mails, and of the facilities of national securities exchanges, in connection with the purchase and sale of securities, did use and employ manipulative and deceptive devices and contrivances, in violation of Title 17, Code of Federal Regulations, Section 240.10b-5, by (a) employing devices, schemes and artifices to defraud; (b) making untrue statements of material fact and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (c) engaging in acts, practices and courses of business which operated and would operate asa aud and deceit upon persons, to wit, KURLAND caused the purchase of securities of AMD on the basis of Inside Information using certain accounts affiliated with New Castle. (Title 15, United States Code, Sections 78j(b) & 78ff; Title 17, Code of Federal Regulations, Sections 240.10b-5 and 10b5-2; and Title 18, United States Code, Section 2.)FORFEITURE ALLEGATION 12. As a result of committing one or more of the foregoing securities fraud offenses, in violation of Title 15, United States Code, Sections 78j(b) and 78ff, Title 18, United States Code, Section 371, and Title 17, Code of Federal Regulations, Sections 240.10b-5 and 10b5-2, as alleged in Counts one and Two of this Information, MARK KURLAND, the defendant, shall forfeit to the United States pursuant to Title 18, United States Code, Section 981(a) (1) (C) and Title 28, United states Code, Section 2461, all property, real and personal, that constitutes or is derived from proceeds traceable to the commission of this offense. Substitute Assets Provision 13. If any of the above-described forfeitable property, as a result of any act or omission of the defendant: a. cannot be located upon the exercise of due diligence; has been transferred or sold to, or deposited with, a third party; c. has been placed beyond the jurisdiction of the court;