Tuesday, 31 May 2016
Last updated 3 days ago
Jul 2 2013 | 2:26am ET
Two corporate insiders who passed confidential tips to hedge funds were spared prison terms yesterday as a reward for their cooperation.
Mark Longoria and Walter Shimoon were each sentenced to time served—a day in jail each—and two years of supervised release. The two were also ordered to forfeit money they received as expert-networkers for providing the information: $170,000 for Longoria and $45,000 for Shimoon.
Both men pleaded guilty in 2011.
“It is because the very nature of this crime and the very nature of its discovery is usually dependent on the use of cooperators,” U.S. District Judge Jed Rakoff said. “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.”
Longoria worked at Advanced Micro Devices and Shimoon at Flextronics International; both moonlighted as consultants for Primary Global Research, which connected them with the hedge funds that received their tips. Shimoon, who also consulted for Broadband Research, passed information to 11 hedge funds, while Longoria admitted to tipping Barai Capital Management and Spherix Capital.