Tag Archives: securities and exchange

PREET BHARARA, the United States Attorney for the Southern District of New York, and JANICE K. FEDARCYK, the Assistant Director-in-Charge of the New York Office of theFederal Bureau of Investigation (“FBI”), announced that DON CHING TRANG CHU, a/k/a “Don Chu,” was arrested this morning on conspiracy charges in connection with his employment at an”expert-networking” firm (the “Firm”). CHU has been charged with conspiring to promote the Firm’s consultation services by arranging for insiders at publicly-traded companies to provide material, nonpublic information (“Inside Information”) to the Firm’s hedge fund clients for the purpose of executing profitable securities transactions.

During the relevant time period, CHU was employed by the Firm and served as a liaison for the Firm to consultants and sources of information in the United States and elsewhere. CHU promoted the Firm’s consultation services by arranging for Firm consultants to provide Inside Information regarding certain public companies’ earnings releases for the purpose of executing profitable securities transactions, where such Inside Information had been disclosed by the Firm consultants in violation of their fiduciary and other duties to their employers.

The Firm’s main office is located in California, but it maintains an office in, among other places, New York, New York. The Firm advertised itself as an “independent investment research firm that provides institutional money managers and analysts with market intelligence,” through a “Global Advisory Team of Experts.” The Firm advertised that its team of consultants “have real-world experience in industries such as healthcare, technology, media, telecommunications, retail, manufacturing, energy and aerospace.” The Firm stated that its consultants “speak one-on-one with [Firm] clients to provide up-to-the-minute intelligence on trends, issues, regulations and dynamics affecting a particular company, product or industry.” Consultants who become part of the Firm’s expert network can earn hundreds of dollars per hour or per call from the Firm for their consultations with Firm clients. Firm clients, which include hedge funds, often pay the Firm tens of thousands of dollars annually for access to the Firm’s consultant network and services.

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