NEW YORK—Hyung Lim, a former technology company employee, pleaded guilty today in Manhattan federal court to conspiracy to commit securities fraud based on his involvement in an insider trading scheme, announced Preet Bharara, the U.S. Attorney for the Southern District of New York, and Mary Galligan, the Acting Assistant Director in Charge of the New York Field Office of the FBI. As part of the scheme, Lim obtained inside information from an employee of NVIDIA Corporation, a publicly traded company, and passed that information to an analyst at a wealth management company who then traded in NVIDIA stock. Lim also pleaded guilty to wire fraud for passing inside information that he obtained while working at Alterra Corporation, another publicly traded company. He pleaded guilty before U.S. District Judge Richard J. Sullivan.
According to the information to which Lim pleaded guilty, statements made during the plea proceeding, and other court documents:
Between 2008 and 2011, Lim obtained inside information from an NVIDIA employee who worked in the company’s finance department. The inside information included earnings information, quarterly revenues and gross margins that had not yet been publicly announced. Lim passed the inside information to Danny Kuo, a research analyst at a wealth management firm headquartered in California. Kuo then provided the information to a portfolio manager at his firm, who executed trades in NVIDIA stock. In exchange for the information, Lim received cash payments and other items of value from Kuo.
Between 2005 and 2008, while working in the marketing department of Alterra, Lim also passed inside information about Alterra to Kuo. At that time, Kuo worked as a research analyst at an investment firm in New York.
Lim, 45, of Los Altos, California, pleaded guilty to one count of conspiracy to commit securities fraud and one count of wire fraud. The conspiracy count carries a maximum sentence of five years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense. The wire fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million. As part of his plea agreement, Lim agreed to forfeit the amount of proceeds obtained as a result of the offenses. He is scheduled to be sentenced by Judge Sullivan on March 4, 2013.
Kuo previously pleaded guilty on April 13, 2012, to conspiracy and securities fraud charges and awaits sentencing.
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