Skip to main content
Press Release

Former Wireless Executive Arrested for Selling Confidential Financial Information

For Immediate Release
U.S. Attorney's Office, District of Massachusetts

BOSTON – A Connecticut executive was arrested this morning on charges that he sold confidential business information regarding the wireless industry to an analyst at a Boston-based financial services firm. 

James Dunham, 59, of Glastonbury, Conn. was arrested on a federal criminal complaint on charges of mail fraud and wire fraud.  He is scheduled to appear in U.S. District Court in Boston at 2:45 p.m. today before Chief Magistrate Judge Jennifer C. Boal.

The complaint alleges that Dunham, formerly the Chief Operating Officer (COO) of a retailer for a major provider of wireless services, had access to confidential information regarding sales, compensation, and product launches at the retailer’s 400 locations.  For more than three years, and unbeknownst to his employer, Dunham had a secret consulting agreement with a financial services firm to provide confidential information in return for which he was paid $2,000 per month.

Specifically, the complaint alleges that seven research notes prepared and distributed by the financial services firm included information supplied by Dunham, including information regarding the status of certain product launches, the number of new subscribers to a specific wireless provider, and sales and return information for specific smartphones.  In particular, Dunham was allegedly the source for an April 11, 2013, research note in which the firm reported that product returns were exceeding sales for a specific smartphone.  Following distribution of that note, the stock price for the smartphone manufacturer dropped seven percent in a single day.

“The black market for business secrets continues to flourish,” said United States Attorney Carmen M. Ortiz.  “Sometimes business secrets are sold for use in insider trading; sometimes they are used for other improper purposes.  But the sale of confidential business information by corporate insiders—in violation of their duties to employers, business partners, customers, and shareholders—is always wrong and illegal.”

“As alleged, Mr. Dunham has undermined the credibility and efficiency of capital markets in favor of lining his own pocket by profiting from the sale of confidential information,” said Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division.  “This complaint should serve as a reminder that no one is excused from obeying the laws of this country, and the FBI will continue to root out corporate fraud wherever it is found.”

The maximum sentence under each charging statute is 20 years in prison, three years of supervised release, and a fine of the greater of $250,000, or twice the gross gain or loss.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

The case was investigated by the Federal Bureau of Investigation, Boston Field Division.  The United States Attorney’s Office also received valuable assistance from the Securities & Exchange Commission.  The case is being prosecuted by Assistant U.S. Attorney Sarah E. Walters, Chief of Ortiz’s Economic Crimes Unit.

The details contained in the complaint are allegations.  The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.


Updated February 26, 2015