SAN FRANCISCO -- A 42-year-old Fremont man was sentenced to prison Thursday for his role in an insider-trading scheme that netted him and two associates more than $5 million, U.S. Attorney Melinda Haag announced Friday.
King Chuen Tang was the chief financial officer at a private equity firm when he learned that mattress maker Tempur-Pedic International, Inc. was planning to make a pre-announcement before its regular earning statements were released, Haag said.
He also learned that his employer, who was not named, was planning to buy up to $50 million in Tempur-Pedic securities, federal officials said. He shared that information with Joseph Seto, 42, of San Francisco, and Zisen Yu, 44, of Fremont, and together they traded on the inside information and netted about $1.9 million, Haag said in a statement.
In a separate scheme, in April 2007, Tang received a tip from his brother-in-law, who was a CFO at another private equity fund, and Tang and others traded on that information and made approximately $3.7 million, federal officials said.
Under plea agreements struck in March 2008, Tang pleaded guilty to one count of conspiracy and one count of insider trading. In September 2011, Seto and Yu each pleaded guilty to conspiracy.
Tang was sentenced to one year and one day in prison followed by three years of supervised release. While on supervised release, Tang will serve six months in home confinement and complete 1,000 hours of community service.
Judge White sentenced Seto and Yu, to six months in prison followed by three years of supervised release. While on supervised release, Seto and Yu are to serve one year in home confinement
All three will begin serving their sentences on April 29.
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