By Shasha Dai
Of DOW JONES LBO WIRE
King Chuen Tang, a former chief financial officer of Friedman Fleischer & Lowe LLC, pleaded guilty to insider trading charges in federal court in San Francisco.
According to an announcement from Joseph Russoniello, the U.S. Attorney for the Northern District of California, Tang admitted that in the spring of 2008, he shared inside information about foam-mattress company Tempur-Pedic International Inc. (TPX) with his friends, and that he and his friends invested illegally using the information.
Tang, also known as Chen Tang, also admitted that in 2007 he received inside information from his brother-in-law Ronald Yee, who worked at the time as CFO of hedge fund ValueAct Capital, on technology company Acxiom Corp. (ACXM). Tang and his friends traded on Acxiom's stock based on the inside information, the announcement said.
In all, Tang and his friends made about $5.5 million in profit from the trades, Russoniello said.
Tang, 40, pleaded guilty to all counts, including one count of conspiracy to commit insider trading and one count of insider trading. Tang is out on bail and scheduled to appear before U.S. District Court Judge Jeffrey S. White in San Francisco on Sept. 16.
The maximum statutory penalty for the conspiracy count is five years of imprisonment and a $250,000 fine. The maximum statutory penalty for the insider trading count is 20 years of imprisonment and a $5 million fine.
Friedman Fleischer & Lowe has said Tang was suspended in April 2008 and later fired. The firm was not named in the case.
Tang's lawyers couldn't be reached for comment late Friday.
(Dow Jones LBO Wire covers news about private equity.)
-By Shasha Dai, Dow Jones LBO Wire; 212-416-2037; email@example.com