Bloomberg News

Ex-Primary Global Consultants Avoid Jail for Insider Trading (2)

July 01, 2013

Two men who worked as consultants for expert networking firm Primary Global Research LLC avoided prison terms in the U.S. government’s five-year investigation of insider trading.

Mark Anthony Longoria, 47, a former Advanced Micro Devices Inc. (AMD:US) employee, and Walter Shimoon, 41, an ex-Flextronics International Ltd. (FLEX:US) executive, both received sentences of two years’ supervised release today by U.S. District Judge Jed Rakoff in Manhattan. Rakoff cited Longoria’s and Shimoon’s cooperation with the government in giving them no prison time.

“It is because the very nature of this crime and the very nature of its discovery is usually dependent on the use of cooperators,” Rakoff said, explaining his decision. “The cold, realistic fact is a price has to be paid for that cooperation and it takes the form of a substantial reward in the form of reduced jail time.”

Rakoff also sentenced both men to time served -- the day that each spent in custody after they were arrested. Longoria must also forfeit $170,000 while Shimoon forfeits $45,500.

Hedge Funds

Longoria and Shimoon both pleaded guilty in 2011. Neither spoke in their sentencing hearings today.

Longoria pleaded guilty to two counts of conspiracy, a count of securities fraud and making false statements to U.S. Federal Bureau of Investigation agents.

Longoria admitted passing confidential information about AMD’s gross margins and revenue to hedge fund managers in 2009. He also said he provided inside information about Western Digital Corp., a hard-drive maker based in Irvine, California, when he worked for that company in 2006.

Longoria moonlighted as a consultant for Primary Global Research LLC, a Mountain View, California-based firm that matched employees of public companies with fund managers for a fee. He said he passed the information to four hedge funds, including Barai Capital Management, whose founder Samir Barai, pleaded guilty to federal charges in 2011.

He testified as a government witness at the trial of James Fleishman, a Primary Global executive who was later convicted at trial and sentenced to 2 1/2 years in prison for helping pass inside information to hedge fund managers.

Sought Leniency

Longoria also helped prosecutors in their case against Level Global Investors LP co-founder Anthony Chiasson and former Diamondback Capital Management LLC portfolio manager Todd Newman, Assistant U.S. Attorney Antonia Apps said in a letter seeking leniency for Longoria in sentencing. Longoria may testify in the November trial of SAC Capital Advisors LP fund manager Michael Steinberg, Apps said.

Shimoon pleaded guilty to two counts of conspiracy and one count of securities fraud. He admitted passing illegal tips while working as a consultant for Primary Global and for John Kinnucan’s Broadband Research LLC. Shimoon also said he passed tips about a Flextronics supplier, OmniVision Technologies Inc., to one of Primary Global’s hedge fund clients.

Kinnucan, whose Portland, Oregon-based firm provided research on technology companies to hedge funds and mutual funds, admitted passing inside tips to clients after publicly refusing to cooperate with prosecutors. He’s serving a sentence of four years and three months.

The Shimoon case is U.S. v. Shimoon, 10-mj-2823, U.S. District Court, Southern District of New York (Manhattan); The Longoria case is U.S. v. Longoria, 11-cr-00032, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Bob Van Voris in Manhattan federal court at rvanvoris@bloomberg.net.

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


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Companies Mentioned

  • AMD
    (Advanced Micro Devices Inc)
    • $3.3 USD
    • -0.05
    • -1.52%
  • FLEX
    (Flextronics International Ltd)
    • $9.93 USD
    • -0.07
    • -0.7%
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