I believe this is the sixth arrest in the “expert network” insider trading scandal which the Justice Department and the US Attorney in Southern New York have been investigating over the past few months.
A California woman has been arrested on charges of leaking secrets about technology companies to hedge funds, as federal prosecutors expand their probe into insider trading.
Winifred Jiau, 43, was charged with one count of securities fraud and one count of conspiracy, said U.S. Attorney Preet Bharara for the Southern District of New York. Jiau faces up to 20 years in prison on the securities fraud charge.
Her lawyer was not immediately available to comment.
Here’s how this worked: Jiau worked inside multiple firms and also as a consultant to an expert network company, where she would release inside information to clients based on her work experience inside the firms, which included Marvell Technology Group Ltd and Nvidia Corp. In this case, Jiau gave sneak peeks of earnings reports before they were released publicly.
I’d expect more of these to be rolled out over the next year. But let’s be clear – while the expert network scandal clearly seems worthwhile for prosecution, and will hopefully make the stock market a little less like a casino where everyone has an inside straight except the individual investor, it’s hardly the most important or most lucrative case of financial fraud happening in the country. These generate decent headlines, but that’s about it.