Poker buddies accused of insider trading swap

Michael P. Tremoglie Sep. 5, 2012, 10:30am

NEW YORK (Legal Newsline) - The Securities and Exchange Commission on Tuesday accused a California man with giving inside information about Nvidia Corporation's earnings to a poker buddy.

The SEC alleges that Hyung Lim of Los Altos, Calif., received $15,000 and stock tips about a pending corporate acquisition for regularly providing a poker-playing friend, Danny Kuo, with nonpublic details ahead of Nvidia's quarterly earnings announcements.

Kuo is a hedge fund manager and he, allegedly, traded on the information and gave it to multi-billion dollar hedge fund advisory firms Diamondback Capital Management and Level Global Investors.

"These hedge fund traders were eager to find an edge in an otherwise competitive marketplace, and Lim provided them that edge for a price," said Sanjay Wadhwa, Associate Director of the SEC's New York Regional Office and Deputy Chief of the SEC Enforcement Division's Market Abuse Unit. "Now one more participant in this sprawling scheme is being held accountable for his illegal transgressions."

Kuo and the hedge funds made nearly $16 million trading in Nvidia securities based on Lim's inside information, the SEC said. The two met at poker parties organized by a mutual friend.

During 2009 and 2010, Lim regularly obtained detailed information about the contents of Nvidia's upcoming quarterly earnings announcements from his friend who worked for the company, the SEC said. Lim also learned nonpublic information in phone conversations with his Nvidia friend, the SEC said. He would allegedly immediately call Kuo to relay the latest inside information.

Lim was allegedly compensated by Kuo for the confidential Nvidia information that he provided. Kuo wired $5,000 to a Las Vegas casino to pay a debt for Lim, and later Kuo made two $5,000 cash payments to Lim, the SEC said. Kuo also provided Lim with nonpublic information about a pending corporate acquisition, which Lim used to make more than $11,000 in trading profits, the SEC said.

The U.S. Attorney for the Southern District of New York has filed criminal charges against Lim.

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U.S. Attorney for the Southern District of New York
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