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Alternative Market Briefing

SEC charges California man for giving hedge fund manager inside information

Wednesday, September 05, 2012

Bailey McCann, Opalesque New York: The Securities and Exchange Commission (SEC) today charged a California man with illegally tipping a hedge fund manager with inside information about Nvidia Corporation’s quarterly earnings that he learned from his friend who worked at the company. According to the complaint, Hyung Lim of Los Altos, Calif., received $15,000 and stock tips about a pending corporate acquisition for regularly providing a fellow poker player, Danny Kuo, with nonpublic details ahead of Nvidia’s quarterly earnings announcements. 

Kuo manages his own hedge fund, the SEC alleges that Kuo traded on this information and also passed the same information to multi-billion dollar hedge fund advisory firms Diamondback Capital Management LLC and Level Global Investors LP.  Those firms were charged and tried earlier this year as the result of a sweeping investigation of broad based insider trading involving several funds and firms.

In a parallel action, the U.S. Attorney for the Southern District of New York today announced criminal charges against Lim. The complaints allege that Kuo and the hedge funds made nearly $16 million trading in Nvidia securities based on Lim’s inside information. Lim would get the information from a friend who worked at Nvidia and call Kuo immediately after any c......................

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