Feeds

sTec flash founder cleared of insider trading charges

Moshayedi brother found not guilty

Top three mobile application threats

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).

Application security programs and practises

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
Microsoft: We're making ONE TRUE WINDOWS to rule us all
Enterprise, Windows still power firm's shaky money-maker
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.