Ex-Flextronics executive admits iPad leaks

A former Flextronics International executive who passed secret information about Apple’s iPad to a securities analyst before its launch has pleaded guilty to insider trading, making him the latest expert networking consultant to admit wrongdoing in the US government’s expansive probe.

Walter Shimoon, a former director of business development for Flextronics, an electronic components supplier to Apple and other technology companies, was arrested in December and charged with insider trading along with two executives of other technology companies and James Fleishman, a former employee of Primary Global Research, a California firm that matches money managers with industry experts.

Mr Shimoon pleaded guilty to conspiracy and securities fraud in a co-operation deal with the government. He is scheduled to be sentenced in 2013. According to his plea agreement, Mr Shimoon provided information to John Kinnucan, head of Broadband Research.

Mr Kinnucan made headlines last fall by refusing to co-operate with an FBI probe into insider trading. Attempts to reach Mr Kinnucan for comment were unsuccessful.

Of the 14 company insiders, hedge fund traders and consultants charged in the expert network investigation, 13 have pleaded guilty or been convicted at trial. Mr Fleishman is the only person fighting the allegations. His lawyer could not be reached on Tuesday.

New York federal prosectors have said that more insider trading arrests are likely. Prosecutors have leads from several individuals who have pleaded guilty and are co-operating, but it is not clear whether there is enough evidence to support them. A former Dell employee said he provided information to another expert network firm and its clients. A former Galleon Group portfolio manager has said prosecutors asked him for information about individuals in Taiwan.

According to a civil complaint filed by the Securities and Exchange Commission, Mr Shimoon, through his consulting deal with Primary Global, allegedly spoke with at least 11 hedge funds which subsequently traded shares of Flextronics and OmniVision. OmniVision supplied cameras to Apple.

Through deals with consultants including Primary Global, Mr Shimoon was paid more than $45,000. Prosecutors allege in court filings that Mr Shimoon had access to Apple’s internal figures as a parts supplier and told Karl Motey, a semiconductor analyst, about a new Apple product known by the code word K48 that would be released in December 2009.

K48 was the secret code word for the iPad tablet. Apple revealed the iPad in January 2010. Mr Motey pleaded guilty and is co-operating with the government.

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