Bail set for woman in NY insider trading case

AP News
Posted: Feb 23, 2011 6:38 PM
Bail set for woman in NY insider trading case

Bail of more than $500,000 was set Wednesday for a California woman accused of feeding inside information about technology companies to hedge funds, making it likely that she will be freed before trial despite the government's insistence that she will flee to her native Taiwan.

Winifred Jiau, 43, has been in custody since she was arrested Dec. 27 in the government's crackdown on specialists in the financial industry who supposedly pass along inside information about companies to hedge funds and pass it off as legitimate research. Jiau, who pleaded not guilty to securities fraud charges, is among a dozen people charged in the ongoing investigation.

U.S. District Judge Robert Patterson agreed to the bail only after she had pledged to turn over the deed to a $25,000 stretch of land and provide $50,000 in cash to go along with $500,000 in cash and property being posted by three friends. She will be required to wear an electronic monitoring bracelet and mostly remain in her Fremont, Calif., home under terms of the bail. She will not be released until all bail conditions are met.

Prosecutors say Jiau earned $200,000 during a two-year span when she provided the inside information while she worked as a consultant for Primary Global Research, a Mountain View, Calif., firm.

Prosecutors have accused Jiau of disclosing financial earnings information about companies including Marvell Technology Group Ltd. and Nvidia Corp.

The government said one of the hedge funds Jiau tipped made more than $820,000 in profits by trading in Marvell securities.

The probe grew from what prosecutors have described as the largest hedge fund insider trading case in history. One-time billionaire Raj Rajaratnam, free on $100 million bail, is scheduled to go to trial next month on securities fraud charges. The founder of the Galleon Group of hedge funds has pleaded not guilty and said he only used public information to decide which securities he bought and sold. Prosecutors say more than $50 million in profits were earned as a result of the scheme.

Jiau has stated that she has only $77,000 in assets, said Assistant U.S. Attorney Avi Weitzman, who questioned where her hundreds of thousands of dollars in earnings had gone.

He said she was evasive when she first spoke with FBI agents and did what she could to dodge them when they first came to her apartment.

"She wanted to make a getaway. She wanted to go back to Taiwan where she wouldn't be prosecuted," he said.

Defense lawyer Frederick Hafetz said most of her money went toward living expenses in the San Francisco area, where he said costs can run high.