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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 22726 / June 12, 2013

Securities and Exchange Commission v. Reema D. Shah and Robert W. Kwok, Civil Action No. 12-CV-4030 (S.D.N.Y.) (ALC)

Former Yahoo Executive Settles SEC Insider Trading Case

The Securities and Exchange Commission announced today that on June 11, 2013, the Honorable Andrew L. Carter, Jr. of the United States District Court for the Southern District of New York, entered a final judgment against Robert W. Kwok, in SEC v. Reema D. Shah and Robert W. Kwok, 12-CV-4030, an insider trading case the SEC filed on May 21, 2012. The SEC alleged that Kwok, a former Senior Director of Business Management at Yahoo! Inc., illegally tipped and traded on material, nonpublic information concerning Yahoo and Moldflow Corporation.

The SEC's complaint alleged that in April 2008, Reema Shah, a former mutual fund and hedge fund portfolio manager at RiverSource Investments, LLC, tipped Kwok material, nonpublic information concerning an upcoming acquisition of Moldflow by Autodesk, Inc., which had been misappropriated by an Autodesk insider and tipped to Shah. The SEC alleged that, based on this tip, Kwok purchased 1,500 shares of Moldflow in a personal account, which he sold after announcement of the acquisition, realizing profits of approximately $4,750. The SEC also alleged that in July 2009, Kwok, in breach of his duty to Yahoo, tipped Shah material, nonpublic information concerning an upcoming announcement of an internet search engine partnership agreement between Yahoo and Microsoft Corporation. The SEC alleged that, based on Kwok's tip, Shah caused certain of the mutual funds and hedge funds she helped manage to purchase shares of Yahoo.

Previously in this action, the Court entered a consent judgment against Kwok ordering injunctive relief and barring Kwok from serving as an officer or director of a public company. The final judgment, also entered by consent, orders disgorgement of $4,754 plus prejudgment interest of $848, and a civil penalty of $4,754. In a parallel criminal action brought by the U.S. Attorney's Office for the Southern District of New York, Kwok previously pled guilty to conspiracy to commit securities fraud and was sentenced to two years of probation and ordered to forfeit $4,754 and pay a fine of $1,000. United States v. Robert Kwok, 12-CR-405 (S.D.N.Y.).

For additional information, see Litigation Release No. 22372 (May 22, 2012).

 

http://www.sec.gov/litigation/litreleases/2013/lr22726.htm


Modified: 06/12/2013