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SEC Accuses Former Intel Employee, Two Others of Insider Trading

September 02, 2000|From Bloomberg News

WASHINGTON — A former Intel Corp. employee made inside trades involving the shares of Ancor Communications Inc. before Ancor announced two transactions planned with Intel, federal authorities alleged Friday.

The Securities and Exchange Commission's Los Angeles office and the U.S. attorney for the central district of California announced the filing of civil and criminal actions against Brian E. Pridgeon, his cousin and the cousin's business partner.

The cousin and his business partner, both residents of Long Beach, plan to fight the charges, their lawyers said. An attorney for Pridgeon, a San Jose resident, couldn't be reached for comment.

While a product marketing engineer at Intel, Pridgeon learned that Intel, the world's biggest computer chip maker, and Ancor planned to work together to develop Intel's Spider chip for use in Ancor's products, the SEC complaint said.

Pridgeon also learned that Intel planned to buy a $14-million stake in Ancor, an Eden Prairie, Minn.-based company that provided switching solutions for networks that connect a company's data storage systems with its computer servers, the SEC said. Ancor has since been acquired by Aliso Viejo- based QLogic Corp.

The SEC alleged that Pridgeon used the information to buy 5,600 shares of Ancor stock, ultimately realizing about $137,000 in unlawful insider trading profits after the Dec. 7, 1999, announcement of the plans.

Pridgeon also allegedly tipped his cousin, Stephon A. Carradine, who in turn tipped his business partner, Craig L. Smith, the SEC said.

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