Two detained in Acer insider trading probe (update)
2014/03/19 16:40:49
Acer Inc. acting spokesman Henry Wang (left).
Taipei, March 19 (CNA) An Acer Inc. employee and a securities broker were detained Wednesday on suspicion of insider trading of the PC vendor's shares, while seven others have been released on bail, the New Taipei District Court said Wednesday.
The two detained were identified as Henry Wang, the company's acting spokesman, and Lo Fang-ju, an employee at a securities company. They have been accused of offloading company shares ahead of major announcements.
Acer manager Chen Chiung-yuan and six other company employees were released following questioning.
Wang and Lo were detained to prevent any possibility of collusion with other suspects, according to prosecutors.
The suspects have been accused of avoiding losses of several million new Taiwan dollars (NT$1 million = US$32,911) by cutting their shares in the company last year ahead of a report that the troubled PC vendor suffered losses of NT$13.12 billion in the third quarter.
The trading also happened shortly before then-Chairman and CEO J.T. Wang announced his resignation Nov. 5.
If the shares were traded with knowledge of the company's losses and change in management, it would constitute a violation of the Securities and Exchange Act.
On Tuesday, prosecutors raided Acer's headquarters in New Taipei's Xizhi District on allegations that a manager responsible for Acer's stock investment acted on instructions from his superior to sell shares just before Wang's announcement.
Acer later in the day denied reports of insider trading, saying these reports are untrue. It is cooperating with the investigation.
Once the world's second-largest PC maker, Acer reported an after-tax loss of NT$7.63 billion (US$252.6 million), or NT$2.8 per share, in the fourth quarter last year. That includes an unexpected NT$1.3 billion write-off of raw materials inventory that quarter.
Acer shares closed down 1.92 percent at NT$17.85 Wednesday in Taipei.
(By Wang Chao-yu, Jay Chen and Elizabeth Hsu)
