SAN DIEGO — A former Qualcomm executive pleaded guilty Thursday to insider trading, admitting making nearly $30,000 three years ago by exploiting non-public stock information.
Robert William Herman, 52, faces a maximum sentence of 20 years in prison, three years of supervised release and a $5 million fine in light of his admissions, according to the U.S. Attorney’s Office in San Diego.
While employed as a director in the North America sales department of Qualcomm, Herman and a co-defendant were part of an informal stock-trading group and occasionally shared tips and opinions about the stock market, according to the plea agreement.
In November 2010, the firm was conducting a review of Atheros Communications Inc., a technology company, to determine whether to acquire it. Herman and the co-defendant repeatedly heard from their immediate supervisor that Qualcomm was contemplating a major acquisition. The supervisor emphasized that the information was secret.
On Jan. 4, 2011, Herman and his co-defendant learned that the acquisition target was Atheros, and they spoke to each other about it by phone, according to court documents.
Shortly after the call ended, Herman purchased 4,000 shares of Atheros at about $37 per share for a total price of more than $148,600. Later that day, after news of the acquisition became public, shares of Atheros increased in value. Herman then sold them all for a profit of $29,318, according to his plea agreement.
Herman’s sentencing is set for Nov. 21.