United States Attorney
Southern District of New York
Wednesday, August 10, 2011
Marvell Finance Employee Charged in New York with Insider Trading Conspiracy
NEW YORK – The former Securities and Exchange Commission (SEC) reporting manager at Marvell Technology Group Ltd. was arrested this morning on charges relating to his involvement in an insider trading scheme. Stanley Ng has been charged with conspiring to commit securities fraud and wire fraud by providing material, nonpublic information about Marvell to Winifred Jiau, for the purpose of executing profitable securities transactions.
The charges were announced by Preet Bharara, U.S. Attorney for the Southern District of New York, and Janice K. Fedarcyk, Assistant Director-in-Charge of the New York Office of the FBI.
“Incredibly, the person designated the ‘SEC Reporting Manager’ for Marvell was allegedly using his special access to non-public information to violate the very federal securities laws he was supposed to be assuring compliance with,” said U.S. Attorney Bharara. “As alleged, Stanley Ng and his co-conspirators traded inside information as casually as some people trade baseball cards. Like so many others recently, he will now be held to account in a court of law.”
“Stanley Ng was the tipper, providing valuable and detailed information to Jiau, in violation of his confidentiality agreement,” said FBI Assistant Director-in-Charge Fedarcyk. “When Ng passed the inside information to others so they could trade on it, Ng violated the law. The FBI is committed to vigorous enforcement of that law.”
According to the complaint unsealed today in Manhattan federal court, other court documents and testimony from the trial of co-conspirator Winifred Jiau:
While employed at Marvell in the finance department as the SEC Reporting Manager, Ng and Son Ngoc Nguyen, who was employed in the finance department of NVIDIA Corporation were recruited to join an “investment club” with Jiau. As part of the investment club, Ng and Nguyen agreed to provide Jiau with inside information regarding Marvell and NVIDIA, respectively. In exchange, Jiau agreed to provide them with stock tips received from other individuals.
The inside information that Ng and Nguyen provided, included detailed, non-public financial earnings of Marvell and NVIDIA, before the companies publicly announced their financial results. Ng had access to Marvell’s non-public earnings results as a result of his position as the SEC Reporting Manager at Marvell, a position he held since 2002.
For example, in May 2008 and August 2008, NG provided Jiau with detailed and accurate financial results for Marvell. At various times, Jiau and Nguyen purchased Marvell stock based on inside information provided by Ng. In addition, Jiau sold the inside information that she received from Ng to portfolio managers at hedge funds -- including Samir Barai and Noah Freeman -- who in turn used the inside information to execute securities transactions in Marvell stock.
Ng, 42, was arrested at his residence in Cupertino, Calif. He has been charged with one count of conspiracy to commit securities fraud and wire fraud, which carries a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. Ng was presented before U.S. Magistrate Judge Bernard Zimmerman in the Northern District of California earlier today.
Jiau, 43, of Fremont, Calif., was previously convicted by a jury of one count of conspiracy to commit securities fraud and wire fraud, and one count of securities fraud. She is scheduled to be sentenced by U.S. District Judge Jed S. Rakoff in the Southern District of New York on Sept. 21, 2011.
Nguyen, 39, of San Jose, Calif., previously pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud. He is scheduled to be sentenced by Judge Rakoff on Nov. 29, 2011.
Barai, 39, of New York previously pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, one count of wire fraud, and one count of obstruction of justice. He is scheduled to be sentenced by U.S. District Judge Deborah A. Batts on Aug. 29, 2011, in the Southern District of New York.
Freeman, 35, previously pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud, and one count of securities fraud.
The case was investigated by the FBI with assistance from the SEC. The investigation is continuing.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which U.S. Attorney Bharara serves as a co-chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
This case is being handled by the U.S. Attorney’s Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Avi Weitzman and David Leibowitz are in charge of the prosecution.
The charges contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.