United States Attorney
Southern District of New York
U.S. ATTORNEY’S OFFICE
NOVEMBER 8, 2010
PREET BHARARA, the United States Attorney for the
Southern District of New York, announced that ALI HARIRI, a
former executive at Atheros Communications, Inc. (“Atheros”), was
sentenced today in Manhattan federal court to 18 months in prison
for his participation in the largest hedge fund insider trading
case in history. U.S. District Judge RICHARD J. HOLWELL, who
imposed the sentence, also imposed a two year term of supervised
release and a $50,000 fine.
Manhattan U.S. Attorney PREET BHARARA said: “Ali
Hariri’s sentencing provides another reminder of how pervasive
insider trading has become and the lengths to which corrupt
insiders will go to misuse confidential information for their own
personal gain. It should also remind those who might contemplate
similar crimes that we will ultimately find you, prosecute you,
and convict you. This Office is committed to stopping insider
trading in its tracks to protect the integrity of our markets.”
According to documents previously filed in Manhattan
federal court and statements made during HARIRI’s guilty plea
proceeding:
From 2008 to March 2009, HARIRI, a Vice President at
Atheros, engaged in an insider trading scheme in which he
obtained material, nonpublic information (“Inside Information”)
relating to Atheros. HARIRI provided this Inside Information to
ALI FAR, a hedge fund manager, for the purpose of executing
profitable securities transactions. HARIRI knew that the
information he provided to FAR was material and non-public, and
he disclosed it in breach of fiduciary and other duties of trust
and confidence that he owed to ATHEROS. In exchange for Inside
Information regarding Atheros, FAR provided HARIRI with tips to
buy and sell the stocks of other technology companies.
* * *
On March 3, 2010, HARIRI, 39, of San Francisco,
California, pled guilty to conspiring to commit insider trading
crimes. HARIRI also pled guilty to substantive securities fraud.
FAR has also separately pled guilty to conspiring to commit
insider trading crimes and to substantive securities fraud. He
is awaiting sentencing.
Mr. BHARARA praised the investigative work of the
Federal Bureau of Investigation. He also thanked the U.S.
Securities and Exchange Commission. Mr. BHARARA noted that the
investigation is continuing.
This case was brought in coordination with President
BARACK OBAMA’s Financial Fraud Enforcement Task Force, on which
Mr. BHARARA serves as a Co-Chair of the Securities and
Commodities Fraud Working Group. President OBAMA established the
interagency Financial Fraud Enforcement Task Force to wage an
aggressive, coordinated, and proactive effort to investigate and
prosecute financial crimes. The task force includes
representatives from a broad range of federal agencies,
regulatory authorities, inspectors general, and state and local
law enforcement who, working together, bring to bear a powerful
array of criminal and civil enforcement resources. The task
force is working to improve efforts across the federal executive
branch, and with state and local partners, to investigate and
prosecute significant financial crimes, ensure just and effective
punishment for those who perpetrate financial crimes, combat
discrimination in the lending and financial markets, and recover
proceeds for victims of financial crimes.
This case is being handled by the Office’s Securities
and Commodities Fraud Task Force. Assistant U.S. Attorneys
JONATHAN STREETER and REED BRODSKY and Special Assistant U.S.
Attorney ANDREW MICHAELSON are in charge of the prosecution.
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