U.S. Securities and Exchange Commission
Litigation Release No. 21559 / June 17, 2010
Securities and Exchange Commission v. Andres Leyva, United States District Court for the Southern District of California, Civil Action No. 09 CV 1565 JLS WVG
SEC SETTLES INSIDER TRADING CASE WITH QUALCOMM'S FORMER DIRECTOR OF STRATEGIC MARKETING
On June 16, 2010, the United States District Court for the Southern District of California entered a final judgment against Andres Leyva, a former Director of Strategic Marketing Analysis at San Diego-based Qualcomm Incorporated. As alleged in the SEC's first amended complaint filed on July 21, 2009, Leyva realized more than $34,000 in illegal profits by trading on the basis of confidential information about Qualcomm's new licensing agreement with Nokia Corporation and the settlement of all litigation between the companies.
According to the SEC's first amended complaint, Qualcomm and Nokia were set to begin trial on July 23, 2008 in a key Delaware case to determine whether Nokia owed Qualcomm substantial royalty revenues when the companies' licensing agreement expired in April 2007. The first amended complaint alleges that on July 22, 2008, the senior Qualcomm executive leading negotiations with Nokia representatives in Delaware informed Leyva that Nokia had surprised Qualcomm with a significant settlement offer and conveyed the key terms of that offer to Leyva. Approximately two hours later, the first amended complaint alleges, Leyva purchased 80 Qualcomm call option contracts priced at $.39 each with a strike price of $50.
After the market closed on July 23, 2008, Qualcomm and Nokia announced their new licensing agreement and a global settlement of all litigation between them. On July 24, 2008, Qualcomm's stock price increased 17 percent to $52.43, and its trading volume increased 394 percent. That same day, the first amended complaint alleges, Leyva sold the 80 Qualcomm call option contracts for a profit of $34,739.98.
To settle the SEC's charges, Leyva has consented, without admitting or denying the allegations in the first amended complaint, to the final judgment permanently enjoining him from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, to pay $36,109.71, representing the disgorgement of his illegal trading profits and prejudgment interest, and to pay a civil penalty of $34,739.98.
For further information, please see Litigation Release No. 21140 (July 20, 2009).