* Ex-Flextronics director latest to plead in broad probe
* Shimoon gave illegal tips on Apple iPad, iPhone
* He faces up to 30 years in prison
(Adds Flextronics no comment)
By Basil Katz
NEW YORK, July 5 A former senior director at
Flextronics International (FLEX.O) pleaded guilty on Tuesday,
telling a U.S. judge he was paid $200 an hour by an expert
network firm to spill inside information to hedge funds.
Walter Shimoon, 39, was the latest out of more than a dozen
accused in a broad insider trading probe to plead guilty in
Manhattan federal court to working illegally while consulting
for Primary Global Research (PGR).
At the plea hearing on Tuesday, Shimoon told U.S. District
Judge Jed Rakoff that he was paid $200 an hour by PGR to give
secrets about Flextronics or its customers to hedge funds and
investors, often over the phone.
"On these calls, I offered specific non-public
information," Shimoon said.
A U.S. representative for Singapore-based electronics
equipment maker Flextronics, Renee Brotherton, declined to
comment on the guilty plea.
Shimoon, arrested in December, was accused of leaking
secrets about Apple Inc (AAPL.O) iPad ahead of its launch and
giving up new details about the company's iPhone 4.
Following an agreement with prosecutors, Shimoon pleaded
guilty to two counts of conspiracy to commit securities fraud
and wire fraud and one count of securities fraud. He faces up
to 30 years in prison at his July 8, 2013 sentencing.
Shimoon on Tuesday also said he provided production
schedules and sales forecasts for Flextronics provider
Omnivision Technologies (OVTI.O) to PGR customers.
"I knew they (the customers) used the information I
provided in purchasing and selling securities," Shimoon said.
One customer, identified in court papers as a hedge fund in
White Plains, New York, was named in court by assistant U.S.
Attorney Antonia Apps as Kingdom Ridge Capital. Shimoon's
contact there, Apps said, was employee Nick Caputo. Caputo did
not immediately return a call requesting comment.
Court documents unsealed on Tuesday said the hedge fund
made $560,000 in profits in October 2009 by trading on
Flextronics secrets provided by Shimoon.
Kingdom Ridge Capital, founded in 2008 by two former SAC
Capital Advisors LP employees, had under $350 million invested
in U.S. equities according to a recent regulatory filing.
In the ongoing investigation, a number of former SAC
traders and analysts have either been implicated or
investigated but no charges have been filed against SAC
Capital's founder, the billionaire trader Steven Cohen or any
other SAC employees.
Shimoon in court also admitted to being paid $27,500 by
independent research firm Broadband Research.
A lawyer for John Kinnucan, the firm's owner, declined to
comment on the hearing, but said his client was innocent of any
"John Kinnucan did not do anything wrong," attorney
Nathaniel Burney said.
The case is USA v Shimoon et al, U.S. District Court for
the Southern District of New York, No. 10-mj-2823.
(Reporting by Basil Katz; Additional Reporting by Matthew
Goldstein; Editing by Lisa Shumaker)