Leaking BlackBerry phones’ confidential information proved costly for one former wireless retail executive, who was sentenced to five months in prison on Tuesday. The executive has been charged with selling confidential industry information to an analyst, who then used it in his report that eventually led to a fall in the stock price of the company.
Dunham sold secret information for $2,000
The convict in this case is James Dunham, who on the completion of his term in prison will serve five months of home confinement and will also pay a fine of $76,000 as per orders by U.S. District Judge Douglas Woodlock in Boston. The office of U.S. Attorney Carmen Ortiz in Boston confirmed the sentence, saying, “We will not hesitate to prosecute individuals who buy and sell confidential corporate information, regardless of whether there is a provable link to insider trading.”
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Dunham is a resident of Glastonbury, Conn. and worked with Wireless Zone as its chief operating officer. Wireless Zone operates over 400 franchise Verizon Wireless outlets. In 2010, Dunham entered into a secret consulting deal with an analyst of a financial firm, Detwiler Fenton, based in Boston. Dunham was tasked to provide wireless industry information to the analyst in exchange for $2,000 per month. The real-time information was used by the analyst for making research reports sent to investors, according to the prosecutors.
BlackBerry not named in court papers
The plot was revealed in April 2013 after Dunham provided the information on a new BlackBerry smartphone to the analyst, the prosecutors said. Though the court papers do not name BlackBerry, the description of the manufacturer matches that of BlackBerry. The launch of the Z10 was considered very crucial for BlackBerry, says Reuters.
Prosecutors claimed that analyst Jeff Johnston was told by Dunham that the returns of the phone were more than the sales at a few of the franchiser’s stores. Following a report based on this information, a decline of 7% was noted in the company’s stock. The report was disputed as “false” by BlackBerry, which then urged regulators to investigate the matter. However, prosecutors claim the information in the report was accurate as far as the franchiser’s stores were concerned. As of now, there is no comment on the case from Dunham’s lawyer.
The case is U.S. v. Dunham, U.S. District Court, District of Massachusetts, No. 15-cr-10110.