By Shasha Dai
Of DOW JONES LBO WIRE
King Chuen Tang, a former chief financial officer of Friedman
Fleischer & Lowe LLC, pleaded guilty to insider trading charges
in federal court in San Francisco.
According to an announcement from Joseph Russoniello, the U.S.
Attorney for the Northern District of California, Tang admitted
that in the spring of 2008, he shared inside information about
foam-mattress company Tempur-Pedic International Inc. (TPX) with
his friends, and that he and his friends invested illegally using
the information.
Tang, also known as Chen Tang, also admitted that in 2007 he
received inside information from his brother-in-law Ronald Yee, who
worked at the time as CFO of hedge fund ValueAct Capital, on
technology company Acxiom Corp. (ACXM). Tang and his friends traded
on Acxiom's stock based on the inside information, the announcement
said.
In all, Tang and his friends made about $5.5 million in profit
from the trades, Russoniello said.
Tang, 40, pleaded guilty to all counts, including one count of
conspiracy to commit insider trading and one count of insider
trading. Tang is out on bail and scheduled to appear before U.S.
District Court Judge Jeffrey S. White in San Francisco on Sept.
16.
The maximum statutory penalty for the conspiracy count is five
years of imprisonment and a $250,000 fine. The maximum statutory
penalty for the insider trading count is 20 years of imprisonment
and a $5 million fine.
Friedman Fleischer & Lowe has said Tang was suspended in
April 2008 and later fired. The firm was not named in the case.
Tang's lawyers couldn't be reached for comment late Friday.
(Dow Jones LBO Wire covers news about private equity.)
-By Shasha Dai, Dow Jones LBO Wire; 212-416-2037;
shasha.dai@dowjones.com