updated 01:08 am EDT, Tue May 22, 2012
Robert Kwok faces fines, business restrictions
Yahoo's former senior director of business management, Robert W. Kwok, and a former mutual fund manager at Ameriprise Financial have agreed to settle insider trading charges. The Securities and Exchange Commission maintains that Kwok and fund manager Reema D. Shah shared confidential information after a chance meeting in 2008 and continued with the information exchange into 2009. Kwok pled guilty to conspiracy to commit securities fraud, and Shah pled guilty to conspiracy. Both await sentencing.
In 2008, Shah and Kwok first met when both were attending different meetings in the same facility. The two met in a hallway and started discussing each other's businesses. Shortly after this initial meeting, Shah told Kwok that she had learned from an inside source that Autodesk was planning on acquiring Moldflow, Inc. Kwok purchased 1,500 shares of Moldflow and sold his shares for a profit.
The following year, in 2009, Kwok confirmed a deal with Yahoo and Microsoft to Shah. Shah purchased 700,000 shares of Yahoo stock through the mutual funds she managed. These shares were later sold for a profit of $389,000. Kwok left the company for a position at LinkedIn in February of 2010 after eight years with Yahoo.
"When corporate executives and mutual fund professionals misuse their access to confidential information, they undermine the integrity of our markets and violate the trust placed in them by investors," said Scott W. Friestad, the associate director of the SEC's enforcement division.
Under the terms of the settlement, Kwok will be barred from serving as an officer or director of a publicly-traded company. Shah will be barred from the securities industry. Both will be required to surrender any personal gains resulting from the actions.