Aug 22 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