May 21 (Reuters) - Federal prosecutors on Monday announced
insider trading charges against a former Yahoo employee and a
fund manager for illegally sharing and trading on secret company
The pair pleaded guilty in Manhattan federal court on
Monday, the Manhattan U.S. Attorney's office said in a press
They were also charged by U.S. securities regulators in a
parallel civil proceeding. The SEC said it is pursuing a civil
settlement with the two.
Prosecutors said Robert Kwok, 36, a former senior director
of business management at Yahoo, had illegally tipped Reema
Shah, 40, about an impending July 2009 partnership between Yahoo
Based on the tip, Shah, who worked at a subsidiary of
Ameriprise Financial Inc, bought 700,000 Yahoo shares and
cleared $389,000 in illegal profits, prosecutors and the U.S.
Securities and Exchange Commission said.
Laura Grossfield Birger and Ted Cassman, lawyers for Kwok
and Shah, did not immediately respond to calls seeking comment.
A spokeswoman for Yahoo, Dana Lengkeek, said Kwok left the
company in February 2010, but declined comment on the case.
Kwok and Shah both pleaded guilty on Monday to one count
each of conspiracy to commit securities fraud, which carries a
maximum five year prison term, prosecutors said. Shah pleaded
guilty to an additional securities fraud charge, which carries
up to 20 years in prison.
Kwok and Shah, who both live in California, first met in
January 2008, authorities said. In exchange for inside
information on Yahoo, Shah told Kwok about the May, 2008
acquisition of Moldflow by design company Autodesk. Kwok made
$4,754 in illegal profits trading on the information, the
The case is SEC v. Reema Shah and Robert Kwok, U.S. District
Court for the Southern District of New York, no. 12-cv-4030.
For the SEC: Robert Kaplan of the SEC
For Shah: Not immediately available
For Kwok: Not immediately available
(Reporting by Basil Katz)
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