Don Ching Trang Chu was arrested Wednesday on charges he arranged for insiders at publicly traded companies to improperly provide information to hedge fund clients of the consulting firm where he worked.
U.S. prosecutors in New York claim in a complaint unsealed Wednesday that Mr. Chu established a relationship with Richard Choo-Beng Lee, a former partner at Spherix Capital. Mr. Lee was employed as an analyst by SAC Capital Advisors LLC, the hedge fund firm run by Steven Cohen, from 1999 to 2004.
Mr. Lee’s hedge fund paid Mr. Chu’s firm, which prosecutors didn’t identify, for tips, according to the government. Inside information was passed concerning Atheros Communications Inc., Broadcom Corp. and Sierra Wireless Inc., according to the government’s complaint.
Mr. Chu is charged with one count of conspiracy to commit securities fraud and one count of conspiracy to commit wire fraud. He faces up to 25 years in prison if convicted of the conspiracy to commit wire fraud counts.