Former Apple Supplier Charged With Leaking Valuable Information

A former executive of an Apple supplier pleaded guilty on Tuesday in a Manhattan courtroom. According to The New York Times, charges include leaking details to hedge fund traders about plans for an upcoming iPhone and the unreleased iPad. Walter Shimoon is a former executive at the electronics company Flextronics, which is an Apple supplier for cameras and battery components. He was arrested last December on the basis of evidence that he tipped off investors about confidential information on Apple’s sales forecasts. The sales forecast figures were based on Apple’s plans to develop a new iPhone and the unreleased iPad, which at the time was codenamed K48. This leaked information led to the charge of insider trading. Shimoon is person number 12 to plead guilty in a government crackdown on expert network firms. These firms generally provide helpful information to investors about various businesses; however, some are over stepping the law by hiring consultants like Shimoon who share inside corporate secrets. Manhattan U.S. Attorney Preet Bharara described all these accused individuals as:

A corrupt network of insiders at some of the world’s leading technology companies served as so-called 'consultants' who sold out their employers by stealing and then peddling their valuable inside information.

The Securities and Exchange Commission (SEC) has strict laws about insider trader information. Shimoon faces a maximum of 30 years in prison and five million dollars in fines. Shimoon pleaded guilty to two counts of conspiracy to commit wire fraud and one count of security fraud. His sentencing is set for July 2013.