A former executive at Foundry Networks Inc was charged with insider trading after tipping a California hedge fund analyst of the company's acquisition plans. The scheme was worth US$27 million and the company acquired was Brocade Communications Systems Inc.
Standing accused for insider trading is the former chief information officer David Riley and Matthew Teeple, analyst for an unidentified hege fund. The two were charged in a felony complaint in Manhattan Federal Court. Also filing charges were the SEC and a private complainant John V. Johnson.
The charges were securities fraud and conspiract to commit conspiracy fraud. According to Manhattan US Attorney Preet Bharara, "When David Riley and Matthew Teeple chose to traffic in inside information involving high-tech companies, they embarked on a high stakes game that has proven to be unwinnable."
Riley provided secret tips about Foundry being purchased by Brocade to Teeple before the deal was formally announced. Two hours after receiving the information from Riley, Teeple called an analyst at the unidentified investment adviser which in turn traded the stocks on the basis of the information illegally acquired.
Join the Conversation