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U.S. Securities and Exchange Commission

Speech by SEC Staff:
News Conference Remarks


Robert Khuzami

Director of the SEC’s Division of Enforcement
U.S. Securities and Exchange Commission

U.S. Attorney’s Office for the Southern District of New York
New York, N.Y.
February 8, 2011

Good afternoon. I'm pleased to be with you to describe the allegations in the SEC's complaint.

PGR was a so-called “expert networking” firm in the “matchmaking” business — matching people who had information with people who wanted it.

They claimed to run a clean operation.

Today we pull back the curtain and reveal that the only matching that was going on here was to match theft with greed.

The theft and greed started with people who worked at companies well-known to all of us: AMD, Dell, Flextronics, and others.

These trusted employees chose to steal information that belonged not to them, but to the company and its shareholders.

They lined their pockets with tens of thousands of dollars by trafficking in that stolen information in a manner that is not unlike an employee who drives to the loading dock late at night and fills the trunk of his car with valuable office equipment and sells it to his neighbor.

They attempted to cover their tracks in some cases by making sure that the calls with PGR clients were not taped, their names were not used, and they were referred to by pseudonyms.

They did this to avoid getting caught by their employers.

Hedge Funds

The greed continued with the hedge funds and their principals who corruptly arranged to receive this stolen information and to trade using that information for profit.

They were looking for detailed, company-specific information about earnings, sales, top-line revenue, product orders and other similar material information with which they could make, in the words of one defendant, “fast money.” And they paid cold, hard cash for that information.

Today’s actions are not a condemnation of all expert networking firms or the consultants who are associated with them who provide legitimate expertise and experience to assist investors in making investment decisions.

But that is not what occurred in the events that underlie today’s charges.

Today’s charges reveal thoroughly corrupt conduct, through and through.

Broad Theme

These corrupt arrangements violate a basic principle that lies at the heart of our capital markets system.

Everyone is expected to play by a single, uniform set of rules.

That basic principle gives investors confidence that the markets are fair and the playing field is level.

Insider trading corrodes that investor confidence.

It undermines the integrity of the markets by tilting, unacceptably, the playing field in favor of those whose greed drives them to betray the duties and confidences they owe others.

And it shortchanges every other investor who executes trades, with all the attendant risks, on the basis of trading decisions made by dint of hard work and genuine analysis.

Today’s actions should make it clear that the price one will pay for providing or receiving such corrupt services is ultimately too high.

All of us here today are sending that message in the strongest possible terms.

There can be no exceptions.

And none will be tolerated.


Let me thank Preet Bharara and Janice Fedarcyk and their teams from the U.S. Attorney’s Office and the FBI.

Their work has been phenomenal and represents the very best in professionalism, dedication and public service.

In particular, the work of the FBI’s New York securities fraud squad has been remarkable and we owe them a debt of gratitude for their skill and close collaboration and coordination with the SEC.

I have seen evidence of their work many times over the years, and this is some of the very best.

Lastly, I want to recognize the hard work and dedication of the SEC staff that conducted this complex, fast-moving investigation with thoroughness and tireless enthusiasm. Their effort has been exceptional. I could not be prouder of what they have accomplished.

The SEC personnel are:

  • George Canellos, Regional Director of our New York Regional Office
  • David Rosenfeld, Associate Director of our New York Regional Office
  • Sanjay Wadhwa, Deputy Chief of our Market Abuse Unit
  • Jason Friedman
  • Joe Sansone
  • Dan Marcus
  • Matt Watkins
  • Neil Hendelman
  • Diego Brucculeri
  • James D’Avino



Modified: 02/08/2011