Former Qualcomm executive pleads guilty to insider trading
Aug 22 (Reuters) - A former Qualcomm Inc sales director has pleaded guilty to insider trading in Atheros Communications Inc after learning that his company planned to buy the rival chipmaker in 2011.
Robert Herman, 52, entered his plea on Thursday in the U.S. District Court in San Diego, U.S. Attorney Laura Duffy said.
Herman faces up to 20 years in prison and a $5 million fine. The sentencing is scheduled for Nov. 21.
Co-defendant Derek Cohen, who was also a director in Qualcomm's North America sales department, has pleaded not guilty. Qualcomm is based in San Diego.
Federal authorities said Herman and Cohen invested more than $500,000 in Atheros stock and options on Jan. 4, 2011, soon after learning about Qualcomm's plan to buy the company, which was announced officially the following day.
News of the $3.2 billion acquisition leaked a few hours after the defendants made their purchases, prompting them to sell their holdings and reap nearly $230,000 of profit, prosecutors said. Herman's share was $29,318, they added.
According to a parallel U.S. Securities and Exchange Commission civil complaint, Herman and Cohen claimed during an internal Qualcomm investigation of possible insider trading that they learned about the Atheros acquisition from news media.
The SEC said this was misleading because the first published news about the acquisition, from The New York Times, did not surface until after Herman and Cohen made their trades.
Paul Pfingst, a lawyer for Herman, did not immediately respond to requests for comment. Michael Pancer, a lawyer for Cohen, did not immediately respond to a similar request.
The case is U.S. v. Herman, U.S. District Court, Southern District of California, No. 14-cr-01202. (Reporting by Jonathan Stempel in New York. Editing by Andre Grenon)