Acting Manhattan U.S. Attorney And FBI Assistant Director Announce Insider Trading Charges Against Managing Director Of Private Equity Fund
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Danny Kennedy, the Acting Assistant Director-in-Charge of the Los Angeles Field Office of the Federal Bureau of Investigation (“FBI”), announced the indictment today of BENJAMIN CHOW, a/k/a “Ben Chow Zhou Bin,” a/k/a “Benjamin Bin Chow,” a/k/a “Bin Zhou,” for conspiracy to commit securities fraud and securities fraud in connection with a $5 million insider trading scheme relating to the securities of Lattice Semiconductor Corporation (“Lattice”). The case is assigned to U.S. District Judge Gregory H. Woods.
Acting U.S. Attorney Joon H. Kim said: “As alleged, Benjamin Chow tipped his friend about a potential acquisition of Lattice Semiconductor Corporation by private equity firms he managed, including one based in China. Chow’s illegal tips resulted in multimillion-dollar profits for his friend and business associate. This type of alleged illegal tipping is not only illegal, but erodes public confidence in our markets. Protecting the integrity of our financial markets remains a top priority of this Office.”
FBI Assistant Director-in-Charge Danny Kennedy said: “Mr. Chow misused his position of trust to undermine the integrity of the market. The FBI and our partners are committed to fairness in the marketplace by holding accountable those who threaten legitimate exchanges by trading on proprietary knowledge.”
According to the allegations in the Indictment filed in Manhattan federal court:
From approximately March to November 2016, CHOW provided a friend and business associate (“CC-1”) with material nonpublic information relating to a potential merger between Lattice and private equity firms managed by CHOW, one based in Beijing, China (“Firm-1”) and one based in Palo Alto, California (“Firm-2”). CC-1 in turn used such information to make millions of dollars in profitable securities trades through accounts opened in the names of family members and associates of CC-1.
Specifically, as Managing Director of Firm-1 and later Managing Partner of Firm-2, CHOW obtained material nonpublic information regarding potential merger agreements between Lattice and Firm-1, and later, Firm-2. Information concerning the potential merger agreements was subject, among other things, to nondisclosure agreements executed between Lattice and Firm-1, and subsequently between Lattice and Firm-2.
In violation of these agreements, and in breach of his duties, CHOW provided CC-1 with material nonpublic information regarding the potential mergers between Lattice and Firm-1 and Lattice and Firm-2, through in-person meetings, voice messages, and text exchanges. On multiple occasions, CC-1 made profitable trades in Lattice shortly after receiving the material nonpublic information from CHOW, yielding a total of at least approximately $5 million in profits for CC-1.
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CHOW, 46, of Los Angeles, California, is charged with one count of conspiring to commit securities fraud, which carries a maximum prison sentence of five years in prison, and 13 counts of securities fraud, which carry maximum sentences of between 20 and 25 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Kim praised the exceptional work of the Federal Bureau of Investigation, and thanked the Securities and Exchange Commission for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Amanda Kramer and Elisha Kobre are in charge of the prosecution.
The allegations contained in the Indictment and Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
 As the introductory phrase signifies, the entirety of the text of the Indictment – and the description of the Indictment set forth herein – constitute only allegations, and every fact described should be treated as an allegation.