Former Tech Company Employee Pleads Guilty In Manhattan Federal Court To Insider Trading Scheme
FOR IMMEDIATE RELEASE
Tuesday, September 4, 2012
Preet Bharara, the United States Attorney for the Southern District of New York, and Mary Galligan, the Acting Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that HYUNG LIM, a former technology company employee, pled guilty today in Manhattan federal court to conspiracy to commit securities fraud based on his involvement in an insider trading scheme. As part of the scheme, LIM obtained inside information from an employee of NVIDIA Corporation (“NVIDIA”), a publicly-traded company, and passed that information to an analyst at a wealth management company who then traded in NVIDIA stock. LIM also pled guilty to wire fraud for passing inside information that he obtained while working at Alterra Corporation (“Alterra”), another publicly-traded company. He pled guilty before U.S. District Judge Richard J. Sullivan.
According to the Information to which LIM pled guilty, statements made during the plea proceeding, and other court documents:
Between 2008 and 2011, LIM obtained inside information from an NVIDIA employee who worked in the company’s finance department. The inside information included earnings information, quarterly revenues and gross margins that had not yet been publicly announced. LIM passed the inside information to Danny Kuo, a research analyst at a wealth management firm headquartered in California. Kuo then provided the information to a portfolio manager at his firm, who executed trades in NVIDIA stock. In exchange for the information, LIM received cash payments and other items of value from Kuo.
Between 2005 and 2008, while working in the marketing department of Alterra, LIM also passed inside information about Alterra to Kuo. At that time, Kuo worked as a research analyst at an investment firm in New York.
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LIM, 45, of Los Altos, California, pled guilty to one count of conspiracy to commit securities fraud and one count of wire fraud. The conspiracy count carries a maximum sentence of five years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense. The wire fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million. As part of his plea agreement, LIM agreed to forfeit the amount of proceeds obtained as a result of the offenses. He is scheduled to be sentenced by Judge Sullivan on March 4, 2013.
Kuo previously pled guilty on April 13, 2012 to conspiracy and securities fraud charges and awaits sentencing.
Mr. Bharara praised the investigative work of the FBI. He also thanked the U.S. Securities and Exchange Commission.
These cases were brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Antonia M. Apps, Richard C. Tarlowe and John T. Zach are in charge of the prosecution.