SEC v. Reema D, Shah and Robert W, Kwok, Case No. 12-cv-430 (S.D.N.Y.). On June 12, 2013, the SEC announced it settled insider trading charges against former Yahoo executive Robert Kwok in a case filed last year. The SEC alleged that Kwok, a former Senior Director of Business Management at Yahoo! Inc., illegally tipped and traded based on inside information about Yahoo and Moldflow Corporation. The SEC alleged that Reema Shah tipped Kwok about an upcoming acquisition of Moldflow by Autodesk, Inc. According to the SEC, Kwok bought Moldflow stock based on the tip and sold it after the acquisition. The SEC also alleged that Kwok tipped Shah with inside information about an upcoming announcement of an internet search engine partnership agreement between Yahoo and Microsoft Corporation. The SEC alleged that Shah caused certain mutual funds and hedge funds she managed to purchase shares of Yahoo based on the tip. The Court previously entered a consent judgment against Kwok ordering injunctive relief and barring Kwok from serving as an officer or director of a public company. The final judgment, also entered by consent, orders disgorgement of $4,754 plus prejudgment interest of $848, and a civil penalty of $4,754. In a parallel criminal action, Kwok previously pled guilty to conspiracy to commit securities fraud and was sentenced to two years of probation and ordered to forfeit $4,754 and pay a fine of $1,000.
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