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Courts

Canyon Bridge co-founder Benjamin Chow convicted of insider trading

Canyon Bridge Capital Partners co-founder and partner Benjamin Chow was convicted Tuesday by a federal jury in New York of insider trading related to the attempted acquisition of Lattice Semiconductor Corp.

Canyon Bridge Acquisition Co., an affiliate of Canyon Bridge, agreed in November 2016 to acquire all outstanding shares of Lattice for about $1.3 billion, but the purchase was blocked in September 2017 by President Donald Trump over concerns that some of the private equity firm's Chinese investors pose a national security issue.

Geoffrey Berman, the U.S. attorney in New York, announced the verdict after a 10-day trial before U.S. District Judge Gregory H. Woods, who will sentence Mr. Chow on Aug. 20. The one count of conspiring to commit securities fraud carries a maximum prison sentence of five years, and the seven counts of securities fraud each carry a maximum sentence of 20 to 25 years. The maximum fine is $5 million.

The indictment was filed Oct. 31, 2017, in U.S. District Court in New York by the then-acting U.S. attorney and the then-acting director of the FBI's Los Angeles office. The Securities and Exchange Commission assisted with the investigation.

The indictment alleged that the insider-trading activity took place from March to November 2016, with Mr. Chow providing a friend and business associate with material non-public information relating to a potential merger between Lattice and two related private equity firms managed by Mr. Chow based in Beijing and Palo Alto, Calif. That friend used the information to make at least $5 million in profitable securities trades through accounts opened in the names of family members and associates, the indictment alleged. As managing director of one firm and managing partner of another, Mr. Chow obtained material non-public information regarding the Lattice acquisitions that was subject to non-disclosure agreements, the indictment said.

In an emailed statement, a Canyon Bridge spokesperson said, "While we have been informed of the verdict, we have not had the opportunity to review the court's ruling. We will be assessing the situation."