(Adds details, lawyer and SEC 'no comment;' links to previous
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
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
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
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
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)