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Ex-Primary Global manager guilty in insider case

Fleishman walks out of the Robert Peckman United States Courthouse after appearing in federal court on insider trading charges in San Jose
Fleishman walks out of the Robert Peckman United States Courthouse after appearing in federal court on insider trading charges in San Jose

By Basil Katz

NEW YORK (Reuters) - A former Silicon Valley sales manager was found guilty of conspiracy charges on Tuesday in connection with the U.S. government's crackdown on insider trading.

James Fleishman, 42, who used to work at Primary Global Research, was convicted by a Manhattan federal jury on one charge each of conspiracy to commit securities fraud and conspiracy to commit wire fraud. He could face up to 25 years in prison when he is sentenced on December 21.

The 12-person Manhattan federal court jury deliberated for less than a day before reaching their afternoon verdict. The trial lasted 2 1/2 weeks.

Ethan Balogh, an attorney for Fleishman, declined to comment on the verdict.

Federal prosecutors and FBI agents have worked for years on cases that suggest employees at "expert networking" firms such as Primary Global helped funnel corporate secrets to hedge funds seeking higher returns.

Prosecutors said Fleishman, a Santa Clara, California resident, helped ferry leaks to hedge funds about confidential information such as revenues or margins from executives at companies, including Advanced Micro Devices Inc and Dell Inc .

The trial is the fourth to result from the government's sprawling insider trading probe, which reached a climax in October 2009 with the arrest of Galleon Group hedge fund founder Raj Rajaratnam. Most of the dozens of defendants pleaded guilty to criminal charges. The once high-flying tycoon Rajaratnam is scheduled to be sentenced next week. In May, a jury found him guilty of 14 criminal charges.

One juror speaking to reporters outside the courtroom said he knew about the Rajaratnam case, but added that most companies on Wall Street are honest.

"We don't have many companies that do that," said juror John Velasco, 26, a financial loan manager, referring to insider trading.

Velasco cited government wiretaps of Fleishman's conversations as having swayed the jury, such as "some of the tapes where point blank the defendant is pretty much giving the incriminating evidence."

(Reporting by Basil Katz and Jon Stempel; editing by Andre Grenon)

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