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December 30, 2010, 6:43 PM EST
By Pamela Maclean
(Updates with background on case in third paragraph.)
Dec. 30 (Bloomberg) -- Winifred Jiau, the former Primary Global Research LLC expert networking consultant arrested in a Justice Department insider trading probe, will remain jailed for the weekend, a federal magistrate judge said.
U.S. Magistrate Judge Nandor Vadas in San Francisco said Jiau, who was granted $250,000 bail earlier today, must remain in custody after her surety failed to appear in court.
Jiau, arrested Dec. 28 in Fremont, California, was accused of selling data on Nvidia Corp. and Marvell Technology Group Ltd., makers of computer components, to portfolio managers at three unidentified hedge funds through Primary Global, according to a filing in Manhattan federal court. The hedge funds paid Jiau $200,000 through the networking firm, prosecutors said.
Assistant U.S. Attorney Wilson Leung argued at a hearing earlier today that Jiau should stay in jail, saying she has incentive to flee now that she’s been charged. Jiau, 43, faces one count each of conspiracy to commit securities fraud and securities fraud and, under sentencing guidelines, she may be sent to prison for 57 months to 63 months if convicted, Leung said.
Vadas initially granted Jiau $250,000 bail and ordered her to give up her U.S. and Taiwan passports and submit to electronic monitoring. Later, Vadas scheduled a hearing for Jan. 3 for Jiau to renew her bail request after the friend who was supposed to provide collateral for her bond failed to appear and Leung said he intended to ask a U.S. district judge in New York to block the defendant from being released.
Expert Consultant
Marilyn Gerber, a spokeswoman for Primary Global, said in an e-mailed statement that Jiau served as an “expert consultant” with the company from September 2006 to December 2008, declining further comment.
Jiau was the fifth Primary Global consultant arrested in an insider-trading crackdown led by the office of Manhattan U.S. Attorney Preet Bharara that also generated criminal charges against two other employees of the company. One of the consultants, former Dell Inc. supply chain manager Daniel DeVore, pleaded guilty Dec. 10.
Expert-networking companies such as Mountain View, California-based Primary Global match investors with specialists who provide insight into specific markets.
Leung called Jiau a “flight risk” yesterday, telling Vadas that FBI agents heard Jiau’s car running and found luggage in her house when they arrived to arrest her.
Agents Stopped Her
Jiau’s attorney, Mark Goldrosen, said at today’s hearing she didn’t attempt to evade Federal Bureau of Investigation agents who came to arrest her. He said she was coming out of her garage when the agents stopped her and that she didn’t hear them knocking on her front door. She stopped immediately and cooperated with them. The luggage they found in her apartment wasn’t packed, he said.
Goldrosen said she has known about the insider trading investigation since mid-December, was aware that others were arrested and didn’t attempt to flee since then.
The attorney described Jiau as a self-employed commodities trader with a graduate degree from Stanford University who has lived in the San Francisco Bay area for almost 18 years.
Jiau was told to come back to court Jan. 12 for a hearing on whether she will be sent to New York to face the charges. Goldrosen said outside court he didn’t yet know whether she would fight the effort to return her to New York.
A confidential informant listened to conversations among Jiau and two hedge fund representatives in which she allegedly provided confidential information of Marvell prior to company announcements, the FBI said.
Marvell, Nvidia
Jiau is accused of providing details of Marvell’s and Nvidia’s public earnings announcements for the first two fiscal quarters of 2008 prior to their public release, according to the FBI.
Jiau passed information to a hedge fund portfolio manager who purchased 118,000 shares of Marvell on May 23, 2008, and an additional 300,000 shares, as well as call options, on May 29, 2008, according to the affidavit.
The portfolio manager’s firm, identified as “Hedge Fund A,” sold its entire position the following day and “netted a profit of over $820,000,” the government said.
The case is U.S. v. Jiau, 10-2900, U.S. District Court, Southern District of New York (Manhattan).
--With assistance from Bob Van Voris in New York. Editors: Peter Blumberg, David E. Rovella
Online Business Consulting | Internet Business Consulting
(Updates with background on case in third paragraph.)
Dec. 30 (Bloomberg) -- Winifred Jiau, the former Primary Global Research LLC expert networking consultant arrested in a Justice Department insider trading probe, will remain jailed for the weekend, a federal magistrate judge said.
U.S. Magistrate Judge Nandor Vadas in San Francisco said Jiau, who was granted $250,000 bail earlier today, must remain in custody after her surety failed to appear in court.
Jiau, arrested Dec. 28 in Fremont, California, was accused of selling data on Nvidia Corp. and Marvell Technology Group Ltd., makers of computer components, to portfolio managers at three unidentified hedge funds through Primary Global, according to a filing in Manhattan federal court. The hedge funds paid Jiau $200,000 through the networking firm, prosecutors said.
Assistant U.S. Attorney Wilson Leung argued at a hearing earlier today that Jiau should stay in jail, saying she has incentive to flee now that she’s been charged. Jiau, 43, faces one count each of conspiracy to commit securities fraud and securities fraud and, under sentencing guidelines, she may be sent to prison for 57 months to 63 months if convicted, Leung said.
Vadas initially granted Jiau $250,000 bail and ordered her to give up her U.S. and Taiwan passports and submit to electronic monitoring. Later, Vadas scheduled a hearing for Jan. 3 for Jiau to renew her bail request after the friend who was supposed to provide collateral for her bond failed to appear and Leung said he intended to ask a U.S. district judge in New York to block the defendant from being released.
Expert Consultant
Marilyn Gerber, a spokeswoman for Primary Global, said in an e-mailed statement that Jiau served as an “expert consultant” with the company from September 2006 to December 2008, declining further comment.
Jiau was the fifth Primary Global consultant arrested in an insider-trading crackdown led by the office of Manhattan U.S. Attorney Preet Bharara that also generated criminal charges against two other employees of the company. One of the consultants, former Dell Inc. supply chain manager Daniel DeVore, pleaded guilty Dec. 10.
Expert-networking companies such as Mountain View, California-based Primary Global match investors with specialists who provide insight into specific markets.
Leung called Jiau a “flight risk” yesterday, telling Vadas that FBI agents heard Jiau’s car running and found luggage in her house when they arrived to arrest her.
Agents Stopped Her
Jiau’s attorney, Mark Goldrosen, said at today’s hearing she didn’t attempt to evade Federal Bureau of Investigation agents who came to arrest her. He said she was coming out of her garage when the agents stopped her and that she didn’t hear them knocking on her front door. She stopped immediately and cooperated with them. The luggage they found in her apartment wasn’t packed, he said.
Goldrosen said she has known about the insider trading investigation since mid-December, was aware that others were arrested and didn’t attempt to flee since then.
The attorney described Jiau as a self-employed commodities trader with a graduate degree from Stanford University who has lived in the San Francisco Bay area for almost 18 years.
Jiau was told to come back to court Jan. 12 for a hearing on whether she will be sent to New York to face the charges. Goldrosen said outside court he didn’t yet know whether she would fight the effort to return her to New York.
A confidential informant listened to conversations among Jiau and two hedge fund representatives in which she allegedly provided confidential information of Marvell prior to company announcements, the FBI said.
Marvell, Nvidia
Jiau is accused of providing details of Marvell’s and Nvidia’s public earnings announcements for the first two fiscal quarters of 2008 prior to their public release, according to the FBI.
Jiau passed information to a hedge fund portfolio manager who purchased 118,000 shares of Marvell on May 23, 2008, and an additional 300,000 shares, as well as call options, on May 29, 2008, according to the affidavit.
The portfolio manager’s firm, identified as “Hedge Fund A,” sold its entire position the following day and “netted a profit of over $820,000,” the government said.
The case is U.S. v. Jiau, 10-2900, U.S. District Court, Southern District of New York (Manhattan).
--With assistance from Bob Van Voris in New York. Editors: Peter Blumberg, David E. Rovella
Online Business Consulting | Internet Business Consulting