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SEC cites Intel employee
September 1, 2000: 7:33 p.m. ET

Former marketing engineer, two others face up to 25 years in prison
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NEW YORK (CNNfn) - A former Intel Corp. employee and two others are facing insider trading charges.

The Securities and Exchange Commission and the U..S. Attorney's office in Los Angeles said Friday that Brian E. Pridgeon, a former product marketing engineer at Intel, his cousin and the cousin's business partner racked up more than $230,000 in unlawful profit from trading in shares of Ancor Communications Inc. last year.

In the summer and fall of 1999, within months of first being employed at Intel, Pridgeon learned that the company planned to enter into an agreement with Ancor, in which the two companies would collaborate to develop Intel's Spider chip for use in Ancor's products, according to the SEC. He also learned that Intel would purchase $14 million in Ancor stock as part of the agreement, the SEC said.

Prior to the public announcement of those transactions, Pridgeon purchased 5,600 shares of Ancor stock, ultimately realizing roughly $137,000 in unlawful insider trading profit, the SEC alleges.

graphicAn Intel spokesman Friday would only say that Pridgeon, 36, of San Jose, Calif., did work at Intel and the company cooperated with the SEC's investigation of the matter. He could offer no additional comment or information about the case.

The Commission's complaint further alleges that Pridgeon shared the information with his cousin, Stephon A. Carradine, who, in turn, told his business partner Craig L. Smith, both of Long Beach, Calif.

They then used the information to purchase $15,000 in options that would have been worthless unless the price of Ancor's stock rose approximately $12.00 over the following two weeks, the SEC said.

The day of the public announcement of Ancor's deal with Intel, Smith sold the options, realizing $95,000 in unlawful insider trading profit, the SEC said.

"These actions affirm the Commission's commitment to ferreting out and prosecuting members of the high-tech community who engage in insider trading," said Valerie Caproni, the SEC's Regional Pacific Director.

"These actions should serve as notice to those in the high-tech industry and elsewhere that, where appropriate, we will continue to work together with the criminal authorities to punish those who participate in insider trading and thereby compromise the fairness of the securities market," Caproni added.

The U.S. Attorney's office is charging each of the three with one count of conspiracy and two counts of securities fraud. If convicted, they could face a maximum of 25 years in federal prison.

None of the three being charged in the case could be reached for comment late Friday.

Intel (INTC: Research, Estimates) shares ended Friday's session 94 cents lower at $73.94. Back to top