San Diego Man Arrested in Connection with New York Insider Trading Investigation

Walter W. Shimoon, age 39, was arrested this morning by FBI special agents pursuant to a federal arrest warrant issued out of the Southern District of New York charging Shimoon with conspiracy to commit securities fraud, conspiracy to commit wire fraud, and wire fraud as a result of his employment as a consultant. Shimoon was arrested at approximately 7:00 a.m. at his San Diego residence, without incident.

According to the complaint filed in this matter, Shimoon was employed by Flextronics International, Ltd. ("Flextronics"), as a senior director of business development in San Diego, California. During the relevant time period of this investigation, Flextronics had a business relationship with Apple, Inc. ("Apple"), pursuant to which Flextronics supplied certain electronic components to Apple, including specifically-engineered camera and charger components to Apple for its iPhone cellular telephones and iPod portable media players.

As part of this business relationship, Flextronics and certain Flextronics employees were provided with information and forecasts regarding Apple purchase or shipping orders regarding certain Flextronics components, as well as information regarding alternative suppliers for Apple products. The confidentiality of this kind of information was governed by non-disclosure agreements executed between Flextronics and Apple. In addition, Apple often shared information with Flextronics about future Apple products under development. The confidentiality of this information was governed by a separate non-disclosure agreement executed between Flextronics and Apple. For example, in or about 2009, Apple informed Flextronics about a highly secretive project being developed that ultimately resulted in the public product launch of the iPad tablet computer.

As part of his employment, Shimoon signed an employment agreement with Flextronics that restricted the disclosure of Flextronics confidential information and prohibited any business activity that competed with Flextronics' business. While employed at Flextronics, Shimoon engaged in consultation calls with Firm clients, during which he provided confidential Flextronics and Apple information, including Inside Information. For example, Shimoon provided highly confidential sales forecast information and new product features for Apple's forthcoming iPhone cellular telephone. Between January 2008 and June 2010, the Firm paid Shimoon more than $22,000 for consultation services he provided.

Shimoon is expected to be booked into the Metropolitan Correctional Center (MCC) sometime today. He is expected to appear before a U.S. Magistrate Judge, in San Diego, on Friday, December 17, 2010.

For more information concerning this case, please refer to the press release issued on Thursday, December 16, 2010, by the U.S. Attorney’s Office, Southern District of New York.

This case is being handled by the U.S. Attorney’s Office, Southern District of New York by Assistant U.S. Attorneys Reed Brodsky, Antonia Apps, and David Leibowitz, and Special Assistant U.S. Attorney Andrew Michaelson are in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty. An arrest itself is not evidence that the defendant committed crimes charged. The defendant is presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.