The Insider Trading Show Renews


In the latest installment of the Insider Trading Show, Winifred Jiau, an expert affiliated with Primary Global Research (PGR), was convicted on counts of securities fraud and conspiracy to pass along confidential information.  Of the fourteen indictments associated with PGR, eleven people have been convicted so far.  Newspaper reports indicate that the prosecutors’ success has re-invigorated investigations, which are resuming as resources shift from prosecution back to investigation.  The Insider Trading Show promises to last a few more seasons.

Winifred Jiau’s twelve person jury took six hours to return the verdict, not swayed by the defense’s plea to send Jiau home to her dog Hunter.  Jiau’s lawyer, Joanna C. Hendon, told jurors that while the information that Jiau obtained about companies may have been nonpublic, it was not material.  Hendon said that Jiau would appeal the verdict.  Jiau faces up to 20 years in prison for the securities fraud conviction and up to 5 years for conspiracy.

Of the fourteen people affiliated with PGR who have been indicted, only three cases remain.  James Fleishman, a former salesperson for PGR, has pleaded not guilty and awaits trial while two experts affiliated with PGR, Mark Anthony “Tony” Longoria and Walter Shimoon, are reportedly in plea negotiations.  They will have additional incentives to negotiate after Jiau’s conviction.  For a complete list of all those involved in expert network related investigations, click here.

Fleishman’s trial will probably lack the entertainment value of Jiau’s lobster antics, but looks to be a tougher case for prosecutors.  His defense will most likely challenge the credibility of witnesses such as Karl Motey, who signed up as a client of PGR at the Federal Bureau of Investigation’s request, and reportedly conducted over 60 consultations seeking incriminating evidence.

Fleishman’s lawyer, in a court filing last month, said the government has gathered information on at least 50 hedge funds and affiliated people, 300 hours of wiretaps containing conversations with some 250 consultants, and turned over 11,000 pages of instant messages between hedge funds and Primary Global employees, and 6,500 pages of email.

After the Fleishman trial, prosecutors will be able to turn their full attention to this treasure trove of information.  There are already signs that the investigations have renewed.  The Wall Street Journal reports that in recent weeks FBI agents have been paying visits to potential suspects, often armed with wiretaps, in an effort to get them to admit guilt or cooperate with the investigation.

Galleon was the first season of the Insider Trading Show.  PGR is Season 2.  Season 3 is now in production.  Fans expect that the new season will center on the hunt for Steve Cohen.  However, with 300 hours of wiretaps and information on at least 50 hedge funds, who knows where the plot will lead?  Settle into your seats, this show is far from over.


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