The trial of a former Silicon Valley sales manager accused in the U.S. government's crackdown on insider trading closed with prosecution and defense arguing over whether he stole information about public companies and shared it illegally.
A federal prosecutor told the Manhattan federal court jury on Monday that defendant James Fleishman and several employees at technology companies and hedge funds trafficked in corporate secrets with intent to gain an illegal inside edge.
But defense lawyer Ethan Balogh said Fleishman worked openly for Primary Global Research LLC, a so-called expert network firm, did not agree with anyone to steal information, and the government did not present evidence of intent to do harm.
The 2-1/2 week trial is the fourth to result from the government's sprawling insider trading probe, which reached a climax in October 2009 with the arrest of Galleon Group hedge fund founder Raj Rajaratnam. Most of the dozens of defendants pleaded guilty to criminal charges. The once high-flying tycoon Rajaratnam is scheduled to be sentenced next week. In May a jury found him guilty of 14 criminal charges.
Federal prosecutors and FBI agents have been working for years on cases that suggest some employees at firms such as Primary Global Research helped funnel corporate secrets to hedge funds seeking to boost their returns.
Certain employees knew that certain consultants were providing important confidential information and they knew it was wrong, assistant federal prosecutor David Leibowitz told the jury in the summation of the government's case against Fleishman. And they didn't care because it was the lifeblood of the business.
Fleishman, a Santa Clara, California, resident, pleaded not guilty to charges of conspiracy to commit securities fraud and conspiracy to commit wire fraud. If convicted, he faces up to 25 years in prison, but individuals convicted of insider trading generally serve lesser terms than the maximum allowed.
Prosecutors said Fleishman helped to ferry leaks about confidential information such as revenues or margins from executives at companies such as Advanced Micro Devices Inc and Dell Inc to hedge funds.
Four defendants, who pleaded guilty and cooperated with the government in the case in the hope of receiving lighter sentences, testified at trial against Fleishman.
The case is USA v Fleishman, U.S. District Court for the Southern District of New York, No. 11-00032.
(Reporting by Grant McCool; editing by John Wallace)