We’ve met the individuals who have been implicated or mentioned in connection to the FBI insider trading sweep, but we thought it was about time we introduce you to the mothership: Primary Global Research (PGR).
Anyone who’s been following the investigation knows that PGR has been a key target in the FBI’s probe.
And so far the only people arrested in the second phase of the investigation (the Galleon arrests were part of the first phase) are current or former PGR workers.
In 2003, PGR was born and continues to live in Mountainview, California. Its parents are a crew of former tech specialists and research analysts who together had more than 50 years of tech-sector experience, having worked at Intel, IBM, Synopsys and Bell Laboratories.
Dr. Unni Narayanan is the patriarch of the PGR family. He’s the CEO and President and hails from Intel, and IBM.
In its infancy, one of PGR’s slogans championed going to war for its clients: “PGR connects you with people in the trenches of the technology business, so you can do fundamental research on the companies you are investing in.”
PGR told clients in 2004 that it had a “vast network of contacts at all levels of a company’s ecosystem,” and could put investors in direct contact with those people. It was the corporate matchmaker to work with – the Match.com of the investor universe.
Because PGR was multifaceted… complex… a multi-tasker. Apart from arranging calls between their experts and investors, the firm also produced its own analyses, which it distrubuted to traders. There were fun trips to Asia, and meals at major conferences.
Experts were, according to the firm, vigorously screened “to find out exactly what he or she knows” and “where he fits on the technology value chain.”
In its youth, PGR was a respected and much sought after player in its field. Hedge funds and mutual funds flocked to its side; PGR was the homecoming king of the expert prom.
Its supporters liked what it had to offer. Clearly; clients paid hundreds of dollars or more to chat on the phone for an hour to its consultants, who determined their hourly pay rate based on, “whatever you think your time is worth.”
In its halycon days, PRG won 1st place in a survey of tech expertise voted on by expert-network clients. The same report also revealed that “clients commented favourably on PGR’s strong coverage of… healthcare,” in addition to tech.
But lately PGR has wandered off the righteous path, according to prosecutors and FBI agents who are going after members of its family.
The government says PGR connected their clients with tech insiders at public companies, who sold corporate secrets about Apple, Advanced Micro Devices, Taiwan Semiconductor Manufacturing and possibly others.
Famous arrested PGR alum include:
- Don Chu: Chu was an Asia specialist at the firm. He was the first person arrested in the current phase of the FBI’s investigation and was fired from the firm subsequently. Chu allegedly “conspired to promote the firm’s consultation services by arranging for insiders at publicly-traded companies to provide nonpublic information to the firm’s hedge fund clients for the purpose of executing profitable securities transactions.” He is supposed to have given tips about Atheros, Broadcom and Sierra.
- James Fleishman: Ok, so technically James Fleishman is not an ‘alum’ yet, but he has been placed on leave after his arrest yesterday. He’s an Institutional Equity Sales exec for the firm, where he worked since ’96.
- Walter Shimoon: He worked with the firm from August 2007 through November 2010, “at which time the relationship was ended.” He’s accused of providing insider tips on Apple and Flextronics; he is currently a VP of Business Development (Asia & Americas) at Flextronics.
- Manosha Karunatilaka: he provided information to raided hedge fund Level Global, while he was a consultant for PGR. He’s now a Business Development Manager at TSMC North America, in Boston and has pleaded guilty.
- Mark Anthony Longoria: He worked with PGR from March 2006 through March 2010, “at which time the relationship was ended.” He’s currently an employee with Advanced Micro Devices in the Austin, Texas. Apparently he was a favourite of PGR’s clients, and is cooperating with the FBI.
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