U.S. Securities and Exchange Commission
Litigation Release No. 21836 / February 3, 2011
SEC v. Mark Anthony Longoria, Daniel L. DeVore, James Fleishman, Bob Nguyen, Winifred Jiau, and Walter Shimoon, Civil Action No. 11-CV- 0753 (SDNY)
SEC Brings Expert Network Insider Trading Charges Alleging that Moonlighting Employees Passed Company Secrets to Hedge Funds and Others
On February 3, 2011, the Securities and Exchange Commission filed a civil injunctive action in the United States District Court for the Southern District of New York, charging two expert network employees and four consultants with insider trading for illegally tipping hedge funds and other investors to generate nearly $6 million in illicit trading profits and losses avoided. The charges stem from the SEC’s ongoing investigation into the activities of expert networks that purport to provide professional investment research to their clients.
According to the SEC’s complaint, PGR consultants Mark Anthony Longoria, Daniel L. DeVore, Winifred Jiau and Walter Shimoon obtained material, non-public confidential information about quarterly earnings and performance data and shared that information with hedge funds and other clients of PGR who traded on the inside information. PGR employees Bob Nguyen and James Fleishman acted as conduits by receiving inside information from PGR consultants and passing that information directly to PGR clients.
The SEC’s complaint alleges that:
The SEC’s complaint charges each of the defendants with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and, additionally, charges Fleishman, Nguyen and Jiau with aiding and abetting others’ violations of Section 10(b) of the Exchange Act and SEC Rule 10b-5. The complaint also charges Longoria and DeVore with violations of Section 17(a) of the Securities Act of 1933. The complaint seeks a final judgment permanently enjoining the defendants from future violations of the above provisions of the federal securities laws, ordering them to disgorge their ill-gotten gains plus prejudgment interest, and ordering them to pay financial penalties. The complaint also seeks to permanently prohibit Longoria, Shimoon and DeVore from acting as an officer or director of any registered public company.