(Reuters) - A former manager at Advanced Micro Devices Inc and a former executive at Flextronics International Ltd avoided prison time on Monday after cooperating in a broad government investigation of insider trading.
Mark Anthony Longoria, a former AMD production manager, and Walter Shimoon, formerly of Flextronics, were both sentenced by U.S. District Judge Jed Rakoff in Manhattan to time served and two years supervised release.
Rakoff also ordered the defendants to pay forfeiture in the amounts of $170,000 for Longoria and $45,500 for Shimoon.
The defendants had pleaded guilty in 2011 to charges that they received thousands of dollars from expert network firms to give inside information to hedge funds.
They agreed to cooperate with the government in an insider trading probe that has since October 2009 resulted in criminal charges against 81 people.
Rakoff said he agreed to leniency “not because this court does not think the crimes are serious, but because the very nature of the crime and very nature of its discovery depend on cooperation.”
He said a “price had to be paid” in sentencing to secure cooperation.
Longoria may still be called to testify in the government’s insider trading case against Michael Steinberg, a fund manager at billionaire Steven Cohen’s SAC Capital Advisors who has pleaded not guilty to insider trading, court papers show.
Many of those charged were caught during investigations of expert networking firms, which connect high-end investors with industry experts.
Longoria, 46, had since 2006 been consulting for expert networking firm Primary Global Research after being laid off from Western Digital Corp.
After joining AMD, Longoria began giving confidential information about his employer to clients and Primary Global, earning $170,000 between 2006 and 2010 and becoming Primary Global’s most frequently used consultant, prosecutors said.
He testified at the trial of former Primary Global executive James Fleishman, who was sentenced in December 2011 to 2-1/2 years in prison.
Shimoon, 41, began consulting with Primary Global in 2008 while working as senior director of business development at Flextronics’ VistaPoint unit, and had a separate consulting agreement with John Kinnucan, who ran Broadband Research.
According to prosecutors, Shimoon disclosed information about Flextronics and customers including Apple Inc and Cisco Systems Inc, earning $59,725 for his efforts.
Prosecutors said Shimoon’s cooperation enabled them to bring a case against Kinnucan, who pleaded guilty to securities fraud and conspiracy charges and was sentenced in January to more than four years in prison.
Longoria and Shimoon are still cooperating in investigations of hedge fund professionals linked to Primary Global and who have yet to be charged, prosecutors said last week.
The defendants’ lawyers declined to comment.
The case is U.S. v. Nguyen, U.S. District Court, Southern District of New York, No. 11-cr-00032.
Reporting by Nate Raymond in New York; Editing by Phil Berlowitz