Chauncey Shey

Washington, DC: (Sep-06-07) The US Securities and Exchange Commission (SEC) brought charges against venture capitalist Chauncey Shey, alleging that he participated in trading on inside information about UTStarcom Inc., a telecommunications company he co-founded. Shey, who lives in Shanghai, heads Softbank China Venture Capital. He was an executive at UTStarcom from 1995 to 1999, and served as a director until 2002, two years after the firm went public. According to the SEC, Shey and his wife began selling shares in the fall of 2005 after an executive at UTStarcom told Shey the company would announce disappointing quarterly earnings. The stock plunged about 26 percent on the news. By selling ahead of the event, the SEC said Shey and his wife averted more than $420,000 of losses. As part of a settlement reached, Shey, a 49-year-old former executive and director at the Alameda, Calif.-based firm, will pay about $872,000 to settle the case, without admitting or denying the SEC's claims. A SEC official in San Francisco office claimed that the Shey case shows that executives who maintain corporate ties have to be very careful about their obligation to keep information confidential. [FORBES: INSIDER TRADING]

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Published on Sep-14-07