(Adds details, lawyer and SEC 'no comment;' links to previous stories)
By Emily Flitter and Sarah N. Lynch
NEW YORK/WASHINGTON, April 23 A former accounting manager for Nvidia Corp has settled with the U.S. Securities and Exchange Commission over allegations he leaked non-public information about the chipmaker that allowed a group of Wall Street analysts to make millions through illegal trades, the SEC announced on Wednesday.
The SEC said Chris Choi of San Jose, California will pay $30,000 to settle civil charges that he shared confidential tips with a friend who passed them on to a circle of hedge fund employees.
Choi is settling without admitting or denying the charges. His lawyer declined to comment.
The Wall Street circle that benefited from Choi's tips included two former portfolio managers, Todd Newman and Anthony Chiasson, whose insider trading convictions are being examined by a federal appeals court.
Another one of the portfolio managers who eventually received information leaked from Choi was former SAC Capital employee Michael Steinberg, who was convicted in December on criminal charges related to insider trading.
The SEC's announcement came a day after a round of intense questioning, as part of Newman and Chiasson's appeal, by judges on 2nd U.S. Circuit Court of Appeals in New York on whether recipients of non-public information can be found guilty of insider trading without any requirement prosecutors prove they knew the source of the tip benefited from the disclosure.
Newman's lawyer questioned why Choi or the other source of inside information in the case - an employee of the computer maker Dell - were never charged with wrongdoing.
The lawyer, Stephen Fishbein, called Newman and Chiasson's case "the only one where the insider was not charged with anything."
The SEC said Choi is the 45th defendant to be charged, as part of a probe into the activities of expert networks. A spokesman declined to comment on whether there was any connection between the timing of the settlement with Choi and the Newman and Chiasson appeal hearing.
The SEC's complaint against Choi said he passed information about Nvidia's quarterly earnings to a friend, Hyung Lim, who in turn received payments from an analyst who shared the information with others.
"Choi provided the material non public information to Lim, in breach of the fiduciary duty that Choi, an employee of Nvidia, owed to Nvidia, and did so with the expectation of receiving a benefit and/or to confer a financial benefit," it said.
Stephen Crimmins, a partner at K&L Gates who is not involved in the case, said Choi's settlement was unlikely to influence the outcome of the pending appeal.
"This is the SEC typing up another aspect of this situation, but I don't think it materially changes the inquiry that the 2nd Circuit will go through as it resolves the Newman and Chiasson case," he said. "The question is, will we require a showing that Newman and Chiasson were aware that a benefit had been conveyed?"
The case is Securities and Exchange Commission v. Choi, U.S. District Court, Southern District of New York, No. 14-2879. (Reporting by Sarah N. Lynch in Washington and Emily Flitter in New York; Additional reporting by Nate Raymond in New York; Editing by Bernard Orr and Andre Grenon)