Feeds

sTec flash founder cleared of insider trading charges

Moshayedi brother found not guilty

Secure remote control for conventional and virtual desktops

The wheels of SEC justice in the US grind exceedingly slowly and sometimes uselessly. Manouche Moshayedi, the founder and CEO of sTec, has just been cleared of insider trading charges filed almost four years ago.

Since then sTec’s business has tumbled and it was bought by Western Digital for $340m – which was characterised as a bit of a distress purchase – in June last year. At $340m, too distressing.

Anyway, part of flash high-flyer sTec’s troubles started in August 2009, with EMC cutting back on its purchase commitments for sTec’s ZeusIOPS SSD. The SEC alleged that Moshayedi had sold shares before investors cottoned on, thus selling therm at an unjustified price which should have been lower if all investors knew of sTec’s EMC problem.

Compounding this was Moshayedi cutting a deal with EMC to bring forward planned future purchases into the then current quarter by offering a discount. EMC duly advanced its orders and, the SEC said, the EMC order rate then looked high but was artificial.

The SEC duly took him to court, alleging he had made a gain of $134m improperly. The Santa Ana, CA, jury in the case returned a not guilty verdict, delivering a third “not guilty” bloody nose to the SEC, which has lost two previous insider trading court cases recently.

Bloomberg reports Moshayedi as saying: ”The justice system works. The jurors listened to the evidence. I am grateful to them.”

John Nester, an SEC spokesman, was quoted as saying: ”We respect the jury’s verdict but will continue to aggressively enforce the law when we believe the evidence supports the allegations.”

Chris says

In this case Moshayedi said the discount deal had in fact been leveraged to avoid end-of-quarter chaos from EMC's habit of late ordering. Had the SEC done its homework, it would have found this was quite true as EMC has over the past few quarters made changes to even out its business from an over-dependence on late quarter sales. We reported on its efforts to lessen back-end loading of customer orders here.

Should have read The Register, Mr Nester. ®

The case was Securities and Exchange Commission v. Manouchehr Moshayedi, 12-cv-01179, U.S. District Court, Central District of California (Los Angeles).

Choosing a cloud hosting partner with confidence

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Big Content outs piracy hotbeds: São Paulo, Beijing ... TORONTO?
MPAA calls Canadians a bunch of bootlegging movie thieves
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
Hungary's internet tax cannot be allowed to set a precedent, says EC
More protests planned against giga-tariff for Tuesday evening
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
Verizon bankrolls tech news site, bans tech's biggest stories
No agenda here. Just don't ever mention Net neutrality or spying, ok?
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
New hybrid storage solutions
Tackling data challenges through emerging hybrid storage solutions that enable optimum database performance whilst managing costs and increasingly large data stores.
Business security measures using SSL
Examines the major types of threats to information security that businesses face today and the techniques for mitigating those threats.