Ex-Primary Global executive to plead guilty: lawyer

By Grant McCool

NEW YORK (Reuters) - A former employee of a so-called expert network firm is expected to plead guilty to charges of conspiring with others to leak corporate secrets to hedge funds in exchange for money, part of a broad U.S. crackdown on insider trading.

Former Primary Global Research executive Don Ching Trang Chu, also known as Don Chu, is set to appear in Manhattan federal court on Tuesday evening at a proceeding for a change of plea, said his defense attorney James DeVita.

Chu, of Somerset, New Jersey, was arrested last November and pleaded not guilty in April to charges of conspiracy to commit securities fraud and conspiracy to commit wire fraud.

The proceeding is before U.S. District Judge Jed Rakoff, who is presiding over the trial of technology consultant Winifred Jiau in the same investigation.

Chu is one of more than a dozen people charged over the solicitation of illegal stock tips from consultants working for expert network firms, which match investment managers with public companies. Prosecutors say they have found instances of insider trading when consultants leaked details that are considered material, nonpublic information.

Chu is accused of arranging for hedge funds to receive inside tips in 2009 on companies including chipmakers Atheros Communications Inc, Broadcom Corp <BRCM.O> and Canada's Sierra Wireless Inc <SW.TO>. Atheros was acquired by Qualcomm Inc <QCOM.O> last month for $3.1 billion.

Prosecutors said that in late 2008, Chu developed a business relationship with a hedge fund manager, Richard Choo-Beng Lee, whose fund paid Chu's firm.

Lee's hedge fund, Spherix Capital, had its employees call a consultant before the consultant's public company was expected to release quarterly earnings, in part to obtain inside information, the government said.

Lee, who founded Spherix with former Galleon hedge fund employee Ali Far, has been cooperating with the government's investigations since April 2009. Lee and Far both pleaded guilty to criminal charges.

Galleon founder Raj Rajaratnam, the central figure in a case described by prosecutors as the biggest probe of insider trading at hedge funds on record, was convicted last month after a high-profile trial on 14 charges of securities fraud and conspiracy.

The case is USA v Don Ching Trang Chu et al, U.S. District Court for the Southern District of New York, No. 10-00032.

(Reporting by Grant McCool; Editing by Tim Dobbyn)