Taiwan Insider Trading
Taiwan Chip Producers at Center of Insider Trading Probe
The U.S. insider-trading investigation that began last year with the arrest of the head of Galleon Group LLC is shedding new light on this nexus of underground research and offshore manufacturing. Last week, a U.S.-based employee of Taiwan’s biggest chipmaker, moonlighting as a consultant for Primary Global Research LLC, was charged with providing material, nonpublic information to investors. Last month, a Primary Global employee with ties to Taiwan was arrested in the probe.
While the Taiwan connection is just emerging in complaints filed by the U.S. Attorney in Manhattan, the nation’s black market for business intelligence and its appeal to hedge funds looking for an advantage are well-established. Since at least 2004, incidents of analysts dealing in confidential chip- production data have occurred at the Taipei offices of banks including JPMorgan Chase & Co. and Lehman Brothers Holdings Inc., said six people in the finance industry with knowledge of the events, who asked not to be identified to protect their business relationships. Source