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(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 .
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. The CEO is expected to offer more details of the new business model next month.