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March 27, 2013

New Web of Insiders Is Charged

A highly productive informant has led federal prosecutors to another group of alleged insider traders, one that includes a hedge-fund analyst and the investment chief for Wyoming’s retirement system.

According to prosecutors, the informant, a former independent researcher named Karl Motey, has recorded hundreds of phone calls, worn a body wire and provided information that led to the successful prosecution of more than 20 people since he was caught engaging in insider trading and pleaded guilty to criminal charges more than two years ago.

On Tuesday, federal prosecutors in Manhattan unveiled the latest fruits of his cooperation when they announced charges in Manhattan against three people who allegedly were tipped about the $3 billion acquisition of computer-equipment maker Foundry Networks Inc. by Brocade Communications Systems Inc. in July 2008.

Prosecutors accused Foundry’s former chief information officer, David Riley, of telling a friend and former colleague named Matthew G. Teeple about the deal.”

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Read full Wall Street Journal article here

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