Qualcomm Managers Charged With Insider Trading
SAN DIEGO (AP) -- Two former Qualcomm Inc. managers were criminally charged with insider trading for allegedly buying shares of a semiconductor maker before Qualcomm announced an agreement to buy the company.
Derek Cohen, 51, and Robert Herman, 52, allegedly used confidential company information to purchase shares in in Atheros Communications Inc. on Jan. 4, 2011, hours before news of the pending acquisition was reported by The New York Times. Qualcomm, a wireless technology titan, bought Atheros for $3.1 billion.
Cohen, Herman and another former Qualcomm manager, Michael Fleischli, 43, were also charged with insider trading by the U.S. Securities and Exchange Commission.
Cohen, a sales director for North America who joined Qualcomm in 1995, profited $205,375 from illegal trades on Atheros shares, according to the SEC. Herman, also a sales director for North America who joined the company in 2007, allegedly profited $29,318 from illegal trades.
Fleischli, a regional sales manager for North America who joined Qualcomm in 2007, profited $3,007, according to the SEC.
Qualcomm, based in San Diego, fired all three defendants in September for violating company policy on insider trading.
"We have been fully cooperating with the government's investigation, and these matters will now be addressed through the legal system," company spokeswoman Christine Trimble said.
Cohen was arrested Saturday at Los Angeles International Airport upon his return from the Philippines and pleaded not guilty Monday, according to the U.S. attorney's office in San Diego.
Cohen's attorney, John Kirby, said, "We do not believe these charges are well-founded, and we believe Derek will be fully exonerated at trial."
Herman was at large, the U.S. attorney's office said. His attorney, Paul Pfingst, rejected the allegations.
Michael Berg, an attorney for Flieschli, didn't immediately respond to a telephone message seeking comment.