SEC Files Insider Trading Charges Against Former Yahoo Executive and Ameriprise Mutual Fund Manager

SEC v. Reema D. Shah and Robert W. Kwok, Civil Action No. 12-CV-4030 (ALC) (S.D.N.Y.).  On May 22, 2012, the SEC announced insider trading charges against Robert W. Kwok, former Senior Director of Business Management at Yahoo! Inc., and Reema D. Shah, a former mutual and hedge fund manager at RiverSource Investments, LLC.  In July 2009, Kwok provided Shah with nonpublic information that an agreement between Yahoo and Microsoft, which had long been the subject of market rumors, would be announced soon.  Based on the information, Shah caused the funds she managed to buy about 700,000 shares of Yahoo.  Two weeks later, the shares were sold for a profit of about $389,000.  In a separate incident, Shah tipped Kwok nonpublic information concerning an acquisition by Autodesk, Inc.  Kwok bought 1,500 shares of the target company and then sold them at a profit of $4,754.  Kwok and Shah are charged with violating Section 10(b) of the Securities Exchange Act Rule 10b-5 thereunder.  Shah and Kwok have agreed to settle, subject to court approval, to permanent injunctions and financial sanctions to be determined at a later date.  Kwok also agreed to an officer and director bar, and Shah agreed to a Commission order barring her from associating with any investment adviser, broker, dealer, municipal securities dealer, or transfer agent.  Finally, Kwok pled guilty in a parallel criminal action to conspiracy to commit securities fraud and Shah pled guilty to securities fraud and conspiracy to commit securities fraud. Both defendants await sentencing.

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One Response to SEC Files Insider Trading Charges Against Former Yahoo Executive and Ameriprise Mutual Fund Manager

  1. Pingback: SEC Settles Insider Trading Case with former Yahoo Executive Robert Kwok | Securities Enforcement Blog

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