NEWS - Monday, November 19, 2001
Five Charged With Illegal Xbox Deal
SAN FRANCISCO (AP) - The government charged five employees of Nvidia Corp. of Santa Clara, Calif., with insider trading that netted them hundreds of thousands of dollars.According to court documents and indictments unsealed Monday, the five bought thousands of shares of Nvidia stock last year based on insider information obtained through the workplace.
The government claims that the defendants were privy to confidential information that the company had signed a $2 billion deal to supply graphics processors for the Xbox (news - web sites) video game console developed by Microsoft Corp.
They’re accused of purchasing the stock before the deal was announced publicly and illegally profiting from it.
The defendants are Robert Prevett Jr., 37 of Sunnyvale, Calif.; Geoffrey Chang, 34 of Castro Valley, Calif.; David Chang, 42 of San Jose, Calif.; Atul Bhagat, 29 of Mountain View, Calif.; and John Lin, 41 of Cupertino, Calif. They remain free on $50,000 bail each. All have pleaded innocent but Lin, who has not been arraigned.
The government said when the company announced the deal days before it was to be disclosed publicly, the five committed securities fraud by purchasing stocks based on insider information.
The Securities and Exchange Commission (news - web sites), meanwhile, on Monday sued 15 persons alleging insider trading of Nvidia stock in connection to the Xbox deal.
They include the five the government has charged criminally, several other company workers, and friends and relatives who are also accused of profiting from the alleged scheme.
Shares of Nvidia were down $1.15 to close at $51.34 on the Nasdaq Stock Market, but were up 41 cents in extended trading.
Source: http://www.yahoo.com/
