The following is from the US Attorney Preet Bharata’s complaint against Don Chu, who was arrested this week on insider trading charges.
The Tech Company Inside Information
On July 20 and 21, 2009, during the time when Lee was cooperating with the Government’s investigation, CHU facilitated a consultation between Lee and an individual (“CC-1”) who worked at a publicly-traded technology company (the “Tech Company”). During that consultation, CC-1 provided Lee with revenue numbers,average sales prices, unit sales for different product lines,gross margin figures, and revenue forecasts for the Tech Company.Later that day, the Tech Company announced its quarterly earnings. Shortly after the Tech Company’s public announcement,Lee called an employee at the Firm (the “Firm Employee”) and told the Firm Employee about Lee’s conversation with CC-1. Lee said that CC-1’s revenue number was “spot on.” The Firm Employee said that CC-1 is one of the Firm’s “more liked guys,” and [referring to revenue numbers] said “that’s what you try to get into.” The Firm Employee said that CC-1 is “known as being fairly accurate.”Between January 2008 and March 2010, the Firm paid CC-1 more than$200,000 for consultation services that CC-1 provided. Duringthat entire time, CC-1 was also employed by the Tech Company.
On or about August 4, 2009, CHU met with Lee in person.During that meeting, Lee mentioned to CHU that Lee was surprised that CC-1, “gave me the number last quarter, it’s like on the spot.” Lee asked whether “you guys” were “nervous,” and CHU replied, “I’m nervous.” Later, CHU said, “Let me tell you the truth. That’s why I don’t want too (sic) involved in the States.. . . S.E.C. [the United States Securities and Exchange Commission] is too strong. In Asia, the S.E.C. can’t do too much there.” Later, CHU explained a method of electronic communication to Lee that CHU believed could not be detected bylaw enforcement. Referring to that particular method, CHU stated, “There’s no, no, no, no copy. If you, it’s better than personal email. . . . There’s no copy saved in the server. Even personal email, there is a copy. . . . So, [UI] just talk. Do,don’t, don’t put it down in writing. Dangerous.”
Mr. Bharata – way to go sir!
With your relentless pursuit of justice not only you gave America a ray of hope, but also made the Indian American community proud. Instead of the helpless Marthas, hope now we can rid the system of real roaches, parasites and leeches and restore confidence.
