Expert Networking Firm Employee Pleads Guilty in Manhattan Federal Court to Insider Trading Charges

PREET BHARARA, the United States Attorney for the Southern District of New York, announced today that BOB NGUYEN, a former employee at an “expert-networking” firm (the “Firm”), pled guilty in Manhattan federal court to an Information charging him with wire fraud and conspiracy to commit wire fraud and securities fraud.

According to the Information to which NGUYEN pled guilty and statements made during the plea proceeding before U.S. Magistrate Judge DEBRA FREEMAN:

NGUYEN worked for the Firm between January 2008 and February 2010. His primary role was to solicit employees of companies to become paid consultants for the Firm (“Firm Consultants”). According to NGUYEN’s guilty plea allocution, one of the goals of the Firm was to recruit current employees of public companies as experts who would provide material, nonpublic information about their companies, including information about the company’s revenues, to clients of the firm (“Firm Clients”).

NGUYEN also obtained material, nonpublic information from Firm Consultants directly, and passed that information along to Firm Clients. Further, NGUYEN facilitated meetings and phone calls between Firm Consultants and Firm Clients knowing that material, nonpublic information would be disclosed. NGUYEN understood that certain of the Firm Clients were money managers, including hedge funds, who sought and obtained this material, nonpublic information from Firm Consultants in order to execute securities transactions. NGUYEN also knew that Firm Consultants included insiders at public companies who were prohibited from disclosing confidential information pertaining to their company’s business and who violated fiduciary and other duties of trust and confidence owed to their employers by disclosing such information to Firm Clients.

NGUYEN, 32, of Stockton, California, faces a maximum sentence of 25 years in prison.

Mr. BHARARA praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission for their assistance. Mr. BHARARA also noted that the investigation is continuing.

This case was brought in coordination with President BARACK OBAMA’s Financial Fraud Enforcement Task Force, on which Mr. 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 Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys REED BRODSKY, DAVID LEIBOWITZ, and ANTONIA APPS, and Special Assistant U.S. Attorney ANDREW MICHAELSON are in charge of the prosecution.