FBI arrest technology firms' staff over insider trading claims

Employees at Dell and AMD among those held over allegedly selling information to hedge funds Staff at technology firms Dell, Advanced Micro Devices and Flextronics International sold inside information to hedge funds, according to the FBI, which made a series of arrests today in its long-running investigation into alleged insider trading on Wall Street.

The US authorities arrested four people including employees of Primary Global Research, an expert network firm, chip maker Advanced Micro Devices (AMD) and Flextronics, which supplies components to Apple and others. The firms have not been accused of any wrongdoing.

James Fleishman of Primary Global was arrested in New York. Mark Longoria, an employee of AMD, was arrested in Austin, Texas. Walter Shimoon of Flextronics was arrested in San Diego. The arrests are part of an investigation into so-called "expert-network" firms and allegations of insider dealing. These firms employ insiders including customers and current employees to give insight into companies.

According to US authorities, Daniel Devore, an employee of Dell, pleaded guilty last month to providing confidential information about the computer firm and its suppliers to hedge funds. Authorities said he was paid $147,750 for the information.

Last month Don Chu, a former Primary Global employee, was charged with conspiracy to commit securities fraud. The justice department alleges Chu arranged for information about public companies to be passed to hedge funds.

FBI assistant director Janice Fedarcyk said: "The information trafficked by the four 'consultants' went way beyond permissible market research; it was insider information." She said the consultants were paid more than $400,000 to participate in phone calls with firm clients. "This wasn't market research. What the defendants did was purchase and sell insider information. Our investigation is most assuredly continuing," she said.