Partner And Co-Founder Of Private Equity Fund Found Guilty Of Insider Trading
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that BENJAMIN CHOW, a/k/a “Ben Chow Zhou Bin,” a/k/a “Benjamin Bin Chow,” a/k/a “Bin Zhou,” was convicted today by a federal jury of conspiracy to commit securities fraud and seven counts of securities fraud in connection with an insider trading scheme relating to the securities of Lattice Semiconductor Corporation (“Lattice”). CHOW’s conviction followed a 10-day trial before U.S. District Judge Gregory H. Woods of the Southern District of New York. Sentencing has been scheduled for August 20, 2018, before Judge Woods.
U.S. Attorney Geoffrey S. Berman said: “As a unanimous jury found, Benjamin Chow tipped his friend about the potential acquisition of Lattice Semiconductor Corporation by private equity firms he managed. Chow’s illegal tips reaped multimillion-dollar profits for his friend. This illegal tipping erodes public confidence in our markets as well as being unlawful. Protecting the integrity of our financial markets remains a top priority of this Office.”
According to the Indictment filed against CHOW, other filings in Manhattan Federal Court, and the evidence admitted at trial:
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 later between Lattice and Firm-2.
In violation of these agreements, on multiple occasions, through meetings in Beijing, China, voice messages, and text exchanges, CHOW provided CC-1 with material nonpublic information regarding the potential merger between Lattice and Firm-1, and later, Firm-2. 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, 45, of Los Altos, California, was convicted of one count of conspiring to commit securities fraud, which carries a maximum prison sentence of five years in prison, and seven counts of securities fraud, each of which carries a maximum sentence of 20 or 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. Berman 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 Max Nicholas, Scott Hartman, and Elisha J. Kobre are in charge of the prosecution.