Insider Trading Probe: Apple Info Divulged

The government's insider trading probe alleges that a former Flextronics employee divulged confidential Apple information.
By James Rogers ,

Flextronics' response has been added to this story.

CUPERTINO, Calif. (

TheStreet

) -- Federal authorities, widening their

ongoing insider trading probe

Thursday, allege that a former

Flextronics

(FLEX) - Get Report

employee divulged confidential sales forecasts and new product features for

Apple's

(AAPL) - Get Report

iPhone.

Walter Shimoon, one of a number of defendants identified by the government, allegedly provided insider information to clients of an "expert-networking firm," which included hedge funds. According to a DOJ statement, Shimoon provided "highly confidential sales forecast information and new product features for Apple's forthcoming iPhone cellular telephone."

"Today's charges allege that a corrupt network of insiders at some of the world's leading technology companies served as so-called consultants who sold out their employers by stealing and then peddling their valuable inside information," said Manhattan U.S. Attorney Preet Bharara.

Components supplier Flextronics is a long-time Apple partner, providing camera and charger parts for the iPhone and the iPod.

"Flextronics has a practice of fully cooperating with regulatory inquiries and has clear policies prohibiting the release of confidential information about the Company and its business partners," explained a spokeswoman for Flextronics, in an email to

TheStreet

. "The employee mentioned in the U.S. Department of Justice's release has been terminated."

In addition to Shimoon, former

AMD

(AMD) - Get Report

employee Mark Anthony Longoria and Manosha Karunatilaka, a former worker at

Taiwan Semiconductor Manufacturing Company

(TSM) - Get Report

, were arrested Thursday morning on charges of wire fraud and conspiracy to commit securities fraud.

The Feds allege that, between January 2008 and June 2010, the expert networking firm paid Shimoon more than $22,000 for consultation services.

Shares of Flextronic rose 14 cents, or 1.84%, to $7.73 on Thursday, as the Nasdaq gained 0.74%. Apple shares rose $1.57 to $321.85.

--Written by James Rogers in New York.

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