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Two former Qualcomm Inc. sales directors Derek Cohen and Robert Herman, both 52, were charged with four counts of securities fraud, according to a statement by the U.S. Attorney’s Office in San Diego.
According to the indictment, Derek Montague Cohen and Robert William Herman were both directors of Qualcomm’s North America Sales Department. In addition to their day jobs, they were also part of an informal stock trading group, sharing tips and opinions about the stock market.
Bloomberg News reported that the sales directors were charged with insider trading, allegedly making $230,000 in profit from trades in Atheros Communications Inc. when Qualcomm bought the company back in 2011.
It has been reported that the Securities and Exchange Commission has filed a parallel lawsuit against both Derek Cohen and Robert Herman as well as a third former Qualcomm salesman, Michael Fleischli, 43, who was also charged with insider trading by the U.S. Securities and Exchange Commission, according to ABC News.
Michele Wein Layne, director of SEC’s Los Angeles Regional Office, said, “As alleged in our complaint, Qualcomm placed trust in these sales managers who proceeded to exploit the confidential information shared with them and conduct insider trading for their personal gain.”
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Derek Cohen’s attorney, John Kirby, said that according to ABC News, “We do not believe these charges are well-founded, and we believe Derek will be fully exonerated at trial.”
A spokeswoman for the San Diego-based company, Christine Trimble, said yesterday in an e-mailed statement that according to Bloomberg News, “The defendants named in the complaint are no longer employed by Qualcomm.” Christine Trimble reported that “We have been fully cooperating with the government’s investigation and these matters will now be addressed through the legal system.”
According to FBI.gov, United States Attorney Laura E. Duffy has said that, “Insider trading is a threat to public companies and investors alike. This indictment should send a message throughout Southern California and beyond: the Department of Justice will not tolerate the manipulation of the securities markets for cynical and selfish personal gain.”
Image credit: www.abc15.com
