The SEC announced yesterday that it had obtained a final judgement on Anthony Longoria, a former expert affiliated with Primary Global Research, which requires him to pay $197,000 in fines and interest. Unlike Longueuil, who was sentenced in September to 2.5 years in prison, Longoria got no jail time (it pays to cooperate with prosecutors.) For a complete who’s who in “Investigation Matchmakers” go to http://www.integrity-research.com/cms/whos-who-in-the-expert-network-investigations/.
Longoria pleaded guilty to blatantly providing inside information: Longoria paid a friend who worked in AMD’s finance department to provide him with “top line” quarterly revenue and profit margin information prior to the company’s release of such information in quarterly financial announcements. Note how the SEC’s release below emphasizes Longoria’s passing of confidential company information rather than material non-public information. The following is an excerpt from the SEC’s News Digest, released yesterday, 11/15/2011:
SEC Obtains Final Judgments on Consent Against Mark Anthony Longoria and Donald Longueuil
The SEC announced that the Honorable Jed S. Rakoff, United States District Judge, United States District Court for the Southern District of New York, entered a Final Judgment on Consent as to Mark Anthony Longoria on November 9, 2011, and a Final Judgment on Consent as to Donald Longueuil on September 12, 2011, in the SEC’s insider trading case, SEC v. Mark Anthony Longoria, et al., 11-CV-0753 (SDNY) (JSR).
The SEC filed its Complaint on February 3, 2011, charging two expert network employees and four consultants with insider trading for illegally tipping hedge funds and other investors. On February 8, 2011, the SEC filed an Amended Complaint, charging a New York-based hedge fund and four hedge fund portfolio managers and analysts who illegally traded on confidential information obtained from technology company employees moonlighting as expert network consultants. The scheme netted more than $30 million from trades based on material, nonpublic information about such companies as Advanced Micro Devices (“AMD”), Seagate Technology, Western Digital, Fairchild Semiconductor, and Marvell Technology Group Ltd. (“Marvell”). The charges were the first against traders in the SEC’s ongoing investigation of insider trading involving expert networks.
The SEC alleged that Longoria, a Supply Chain Manager at AMD, was privy to confidential information about AMD’s internal sales figures for the company’s various operational units. In addition, in at least 2009, Longoria paid a friend who worked in AMD’s finance department to provide him with “top line” quarterly revenue and profit margin information prior to the company’s release of such information in quarterly financial announcements. From 2006 to 2010, Longoria regularly provided Primary Global Research LLC (“PGR”) and PGR clients with this inside information so it could be used to trade securities. Longoria received a total of $178,850 for talking to PGR and its clients.
The Final Judgment entered against Longoria: (1) permanently enjoins him from violations of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), Exchange Act Rule 10b-5, and Section 17(a) of the Securities Act of 1933; (2) orders him liable for disgorgement of ill-gotten gains of $178,850, together with prejudgment interest of $18,328.94, for a total of $197,178.94; and (3) permanently bars him from acting as an officer or director of a public company. Based on Longoria’s agreement to cooperate with the SEC, the Commission did not seek a civil penalty.
With respect to Longueuil, the SEC alleged that in May 2008, while Longueil was working as a managing director at Empire Capital Management LLC (“Empire Capital”), Longueuil received material nonpublic information regarding an earnings report about to be issued by Marvell. Longueuil received this information from co-defendant Noah Freeman, who had received the information from co-defendant Winifred Jiau, a paid consultant at PGR. Jiau herself had received the information from a Marvell employee. After receiving the material nonpublic information, Longueuil caused Empire Capital to purchase more than 800,000 shares of Marvell stock. Days later, when Marvell announced better-than-expected quarterly results, Empire reaped a total of more than $2.5 million in profits.
The Final Judgment entered against Longueuil: (1) permanently enjoins him from violations of Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5; and (2) orders him to pay disgorgement in the amount of $250,000, plus prejudgment interest in the amount of $102,832.60, for a total of $352,832.60. Based on Longueuil’s agreement to cooperate with the SEC, the Commission did not seek a civil penalty. In addition, on September 27, 2011, the Commission issued an order on consent in a related administrative proceeding that bars Longueuil from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization. [SEC v. Mark Anthony Longoria, et al., Civil Action No. 11-CV- 0753 (SDNY) (JSR)] (LR-22153)