SAN DIEGO (CNS) - An indictment unsealed Monday charges two former Qualcomm sales directors with insider trading in connection with an acquisition by the Sorrento Valley-based mobile-communications chip maker.
Derek Montague Cohen and Robert William Herman, while employed as directors of Qualcomm's North America sales department, learned that the firm was about to acquire Atheros Communications Inc., a publicly traded California technology company, according to prosecutors.
One day before Qualcomm officially announced the acquisition in early 2011, Cohen and Herman placed more than $500,000 in trades on various Atheros securities, including stock purchases and option contracts, allegedly motivated by the inside information.
At the same time, Cohen allegedly covered a short position that he maintained, in violation of company policy, on Qualcomm stock. Shortly after Cohen and Herman placed their trades, the New York Times' "DealBook" blog leaked news of the impending acquisition, causing shares of Atheros to dramatically increase in value.
Cohen and Herman then sold their securities, realizing a total profit of nearly $230,000. The indictment alleges that Cohen and Herman falsely claimed to in-house Qualcomm lawyers and staff that they had only traded after reading a leaked news item, though trading records, combined with records of the New York Times Company, belied the claim.
In a parallel action, the Securities and Exchange Commission has announced that it will pursue civil insider-trading charges against the two 52-year-old San Diego residents.
Cohen was arrested Saturday at Los Angeles International Airport upon his return from a trip to the Philippines. Herman remains at large.
Cohen was arraigned on the indictment in federal court in Los Angeles Monday afternoon. He entered a not-guilty plea and was to be released on a $100,000 bond. He is scheduled to appear before a federal magistrate in San Diego on Wednesday for a status hearing.
The defendants face maximum penalties of 20 years in prison and fines of $3 million each.
An Oklahoma mother was in San Diego Monday, as she drives across the country in her 15th Caravan to Catch a Killer.
On Memorial Day, some veterans are on mission as they continue their fight to prevent veteran suicide.
A May grey Memorial Day had two San Diego drivers seeing red after a suspected road rage incident turned violent Monday.
Rookie Hunter Renfroe hit a grand slam off Kyle Hendricks that helped quiet all the Chicago Cubs fans at Petco Park and overshadow a shaky day by San Diego Padres pitchers.
For a solemn occasion, hundreds surrounded Mt. Soledad National Veterans Memorial for the Memorial Day program emceed by AM 760's Brett Winterble.
A military family in Claremont said it's something that may never happen again - a father and eight of his sons went off to war and all came home alive.
Vice Adm. Nora Tyson, commander of the Navy's Third Fleet, was the keynote speaker Monday at the annual Memorial Day observance at the Fort Rosecrans National Cemetery.
The county Medical Examiner's Office Monday released the name of a man killed after being struck by a passenger train.
Mayor Kevin Faulconer and his aides met with SoccerCity investors 25 times between January 2016 and this past February, the San Diego Union-Tribune reported Monday.