San Diego, California - United States Attorney Laura E. Duffy announced that Robert William Herman pled guilty to one count of insider trading. At the time of his illegal trade, Herman was a director in the North America Sales Department of Qualcomm, Inc. (QCOM).

According to Herman’s plea agreement, Herman and a co-defendant were part of an informal stock trading group, and occasionally shared tips and opinions about the stock market. By November 2010, Qualcomm was conducting a review of Atheros Communications, Inc., a technology company, to determine whether to acquire it.

Also according to Herman’s plea agreement, Herman and the co-defendant repeatedly heard from their immediate supervisor that Qualcomm was contemplating a major acquisition—emphasizing that the information was secret. As part of Herman’s plea, he admitted that, on January 4, 2013, he and his co-defendant learned that the acquisition target was Atheros, and they spoke to each other about it by telephone.

Shortly after the telephone call ended, Herman purchased 4,000 shares of Atheros at approximately $37.17 per share for a total price of more than $148,680. Later that day, after news of the acquisition became public, shares of Atheros increased in value. Herman then sold them all for a profit of $29,318.

FBI Special Agent in Charge, Daphne Hearn, said, “Today’s conviction sends a message, that insider trading results in only temporary gains that can lead to long-term losses, to include fines and prison time. The FBI will continue to aggressively pursue those cheaters who don’t play by the same rules so the American public will have confidence in our economic system.”

United States Attorney Duffy commented: “Insider trading is a serious offense. This office will continue to work closely with the FBI and other law enforcement partners to protect our nation’s financial markets.”

Herman’s sentencing is currently set for November 21, 2014 at 9:00 a.m. before the Honorable Janis L. Sammartino.

Defendants

  • Robert William Herman
  • Age: 52
  • San Diego, CA

Summary of Charges

  • Title 15, U.S.C., Secs. 78j(b), 78ff—Securities Fraud (Insider Trading). Maximum penalties include 20 years in prison, $5 million fine and three years of supervised release.