Insider Trading Alleged

September 1, 2000

Silicon Valley has served as the incubator to the web’s newly hatched ideas and companies, which in the past has sent many web stocks soaring. Some stocks have soared to such heights that individuals are tempted to use the market to get rich quick. Not just the stock market is on the rise, but insider trading as well. Such may be the case of one Nvidia employee who allegedly purchased call options once he learned of the Microsoft/Nvidia partnership to manufacture and design the X-Box video game console. Once the partnership was announced publicly, the employee allegedly sold his options and made a quick profit of around $450,000. The employee has reportedly been fired from his position at Nvidia, and has been charged with securities fraud and wire fraud as well.

Reports have indicated that such activities of insider trading have been on the rise because the values of many tech stocks have risen drastically on news announcements, providing a fertile environment for quick profits. Although such activity is on the rise, be aware that the FBI and SEC are watching.