Bloomberg News

Ex-Nvidia Analyst Says He Passed Inside Tips to Networker Jiau

June 16, 2011

June 16 (Bloomberg) -- A former Nvidia Corp. financial analyst said he passed confidential information about his company to a former Primary Global Research LLC consultant after she befriended him and suggested they form an investment club.

Sonny Nguyen, 39, the former analyst, testified yesterday that he passed data about Nvidia’s quarterly earnings once to Winifred Jiau, 43, in August 2008. He said the two met when Jiau worked as a contract employee at the Santa Clara, California- based chipmaker in about 2007 and she was about to leave the company.

Jiau, 43, is on trial charged with illegally passing tips about Nvidia and Marvell Technology Group Ltd. to hedge fund managers. She is the first of the expert networkers, who provide industry information to financial company clients, to go to trial on charges of securities fraud and conspiracy. She faces as long as 25 years in prison if convicted.

“She was asking me to provide Nvidia’s inside information,” Nguyen testified, adding that he knew that’s what she wanted. “I had access to all the company’s financial data,” Nguyen said.

Assistant U.S. Attorney Avi Weitzman asked Nguyen what he understood Jiau’s motive was.

“My understanding was that she was going to buy or sell for personal gain,” Nguyen said. “It would be stock tips of inside information from various companies.”

No Payment

Nguyen said he didn’t receive any payment for the information, saying she gave him stock tips. He testified he only once passed nonpublic data about Nvidia to Jiau, in August 2008, after she called him repeatedly on his mobile phone while he was at work on the day before earnings were announced.

”It was annoying and pestering,” he said. “I continued to ignore them.” He didn’t answer her calls, and Jiau continued calling during the evening, while he ate dinner at his in-laws’, after he got home and when he was giving his son a bath, he said.

He could see by the telephone number on his phone that it was Jiau who called him, Nguyen testified.

“I lost my patience,” he said. “I was very annoyed,” he said. Nguyen said when he answered the phone, “the first thing she said to me sarcastically was ‘I’m going to get killed,’” he said. “It was a guilt trip.”

“I gave her the earnings data and for the future quarter,” he said.

Weitzman asked why.

Why He Told

“For several reasons,” Nguyen said. “First, she was my friend. I trusted her, so I felt loyal. I was doing her a favor. But the other thing that took me over the top -- I grew really impatient. I just wanted her to go away, so I gave her what she wanted.”

Nguyen and Jiau met regularly for lunch at Nvidia’s cafeteria while she worked there, and he would watch her dog for her as she got food, he said.

They met for meals outside work, and Jiau invited him and his family, along with Stanley Ng, a Marvell employee, to lunch at a Cheesecake Factory restaurant in 2007, Nguyen said.

Jiau also gave Nguyen other gifts, such as an Apple Inc. iPhone when it was introduced and at least two live lobsters between Thanksgiving and Christmas 2007.

Noah Freeman, a former SAC Capital Advisors LP portfolio manager who pleaded guilty in the case and testified last week, said that he sent Jiau gifts and paid her at least $5,000 a month for tips about Nvidia and Marvell.

Dead Lobsters

Freeman testified that in 2007 he sent Jiau several iPhones, Cheesecake Factory gift certificates and at least two dozen live lobsters from Maine in November and December 2007.

Jurors laughed when Nguyen described going with Jiau to a FedEx office to pick up a shipment of live lobsters that turned out to be dead.

Jurors have seen an e-mail to Freeman from his assistant about the incident, which read, “Typical Winnie to let 12 lobsters die at FedEx, she has no heart.”

The case is U.S. v. Jiau, 1:11-cr-00161, U.S. District Court, Southern District of New York (Manhattan).

--Editors: Charles Carter, Andrew Dunn

To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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