PGR Employee Gets Two Years Probation, Consultant Faces Years In Prison

Sep 8 2011 | 12:27pm ET

A former Primary Global Research employee was sentenced yesterday to two years of probation for his role in the insider-trading scandal that engulfed that expert-networking firm. At least one of those experts is unlikely to be so lucky.

Don Ching Trang Chu, the first person arrested in the case, became the first sentenced yesterday. U.S. District Judge Jed Rakoff said yesterday that Chu's role in the scam was "minimal" and didn't warrant jailtime—Chu had faced up to six months in prison.

"The defendant did not financially benefit from this conduct and otherwise has had a clear record," Rakoff said. "I find this to be one of the very rare instances where the [federal sentencing] guidelines"—which called for probation—"range is reasonable."

Chu, who pleaded guilty to conspiracy in June, said that he was "extremely sorry for what I have done." He admitted to passing confidential information to former SAC Capital Advisors trader Richard Choo-Beng Lee, who pleaded guilty as part of the Galleon Group insider-trading case. He also said that his tips were shared with former SAC portfolio manager Noah Freeman and Barai Capital Management founder Samir Barai, both of whom have also pleaded guilty in the case.

Another of those who pleaded guilty in the case, Manosha Karunatilaka, won't likely get off so easily. Federal prosecutors, who pointedly did not object to any sentencing for Chu that fell within the guideline range, have asked that he served as much as almost four years in prison for his role in the scam.

Karunatilaka pleaded guilty in May, admitting that he passed confidential information about his employer, Taiwan Semiconductor Manufacturing, to Primary Global clients, earning himself about $35,000.

Prosecutors said those payments merited a prison term of between 37 and 46 months.

"For tens of thousands of dollars, he cheated the system and provided sophisticated stock traders with an unfair advantage over the average investor," assistant U.S. Attorneys Antonia Apps and David Leibowitz said.

Rakoff is to sentenced Karunatilaka on Sept. 15.


In Depth

Whisky Business: The Ultimate Liquid Alternative Investment

Sep 15 2014 | 7:02am ET

David Robertson knows his single-malt whisky—he was the Master Distiller at the...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

The Cult of Loss Aversion: A Call to Rethink Risk in Global Macro Investing

Sep 4 2014 | 5:45am ET

In the wake of a traumatic loss, whether it is financial or personal, it is just...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

In search of the ‘new normal’ at the Fed

The Federal Reserve keeps baby-stepping toward a “normalization” of monetary policy. But just what is normal?

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.