updated 10:10 am EDT, Thu September 15, 2011
Shared details of iPad 1 LCD shipments
A former manager with Samsung US, Suk-Joo Hwang, had admitted to leaking details of parts shipments for the first-generation iPad, Bloomberg reports. Hwang made the admission in a federal court in New York yesterday, testifying under immunity in the case of James Fleishman, an executive with Primary Global Research. Fleishman is charged with two counts of conspiracy, accused of facilitating a scheme in which workers at various companies would pass secret information to fund manager clients of PGR. PGR is a so-called "expert networking" firm, but the legality of such operations has been brought into question.
Hwang explains that at a restaurant lunch in Mountain View, California in December 2009, he met with Fleishman and a hedge fund manager identified as "Greg." During the meal he shared data about Samsung's LCD shipments to Apple. "One particular thing I remember vividly was that I talked about the shipment numbers of Apple, it was about iPad," Hwang told a jury on Wednesday. "This is in December 2009, before it [Apple] came out with the tablet PC, they didn't know the name then, so I talked to them about the tablet shipment estimates in that meeting."
Greg was "very excited" about the information, according to Hwang. "In fact, I said, 'Please, just keep this to yourself,'" he explains. At the dinner, Fleishman allegedly nodded his head. Hwang adds however that as he passed along the shipment data, he realized a man at a nearby table was staring at him, and he became worried that the person might be an Apple worker who had overheard; he flipped over his company badge to hide his name and the Samsung logo. "After I said it, I looked around," Hwang comments. "The first thing I thought was 'Wow, I said it too loud' and then I really freaked out."
The former manager notes that he became increasingly concerned about being discovered as a leak. Not long after the lunch, a colleague is said to have told him that Samsung had lost an Apply supply contract. "I thought, 'Oh that guy was an Apple guy and they found out,'" states Hwang. "I was scared."
In all he made about $38,000 in consultancy fees from PGR between 2004 and 2010. After a promotion in February of last year, Hwang claims that to have told PGR executives that he wanted to stop working for them. In response PGR officials said they would allow him to work anonymously, and promised to raise his fees from $200 an hour to $350. This kept Hwang on board until August 2010. In October, though, FBI agents came to his home and asked about his PGR work; Hwang admits to having initially lied.
He was ultimately fired by Samsung in June 2011, although he has not been charged with any criminal offenses. His current immunity is limited to testimony in the Fleishman case, and has an exception if he commits perjury. Should Fleishman be convicted he may face up to 25 years in prison.