Acer employee arrested in insider trading probe

Acer employee arrested in insider trading probe

Summary: Authorities identify 10 suspects, including Acer spokesperson Henry Wang, after conducting raids at 14 office locations to investigate allegations that shares were sold just before the Taiwanese PC maker was due to announce its third-quarter 2013 losses.

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TOPICS: Hardware, Legal
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An Acer employee and a stockbroker have been arrested in Taiwan amid investigations into insider trading, which allegedly took place before the company announced its losses last year. 

Henry Wang, spokesperson for the Taiwanese PC maker, was detained by local authorities who added that 10 suspects in total were identified including six others who were arrested and released on bail, according to a Bloomberg report Wednesday. Another had agreed to be a prosecution witness upon questioning, said Lee Hai-Lung, a spokesperson for the New Taipei District Prosecutors Office.

He said the suspects had profited NT$5 million (US$164,424) from exploiting information detailing the company's third-quarter 2013 losses before it was due to  publicly announce the numbers. If found guilty, they face a maximum jail sentence of 10 years and fine of up to NT$200 million, Lee said. 

Acer shares dipped to a 12-year low on November 6, a day after it reported a worse-than-expected loss of NT$13.1 billion (US$430.79 million) and the resignation of its former CEO J.T Wang. The dismal numbers prompted the company to slash its workforce by 7 percent and it appointed Jason Chen as its new CEO the following month

According to Lee, Taiwan's market regulator Financial Supervisory Commission spotted stock trading irregularities before Acer was due to announce its third-quarter 2013 earnings and reported the findings to the authorities. 

Investigators and prosecutors were then sent by the New Taipei District Prosecutors Office on Tuesday to raid 14 locations operated by Acer, including its headquarters in Xizhi, reported The China Post. 

The PC maker confirmed reports of the raids and arrests, and said it was cooperating with authorities. Various documents and relevant materials were seized during the raids, the company said in its stock exchange filing on Tuesday. 

Chen in January said Acer will be depending on its existing hardware and software competencies to turn the company around, including plans for a "Build Your Own Cloud" product. The CEO is expected to offer more details of the new business model next month. 

Topics: Hardware, Legal

About

Eileen Yu began covering the IT industry when Asynchronous Transfer Mode was still hip and e-commerce was the new buzzword. Currently a freelance blogger and content specialist based in Singapore, she has over 16 years of industry experience with various publications including ZDNet, IDG, and Singapore Press Holdings.

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