This has been the month of Yahoo executives behaving badly. Just a week after CEO Scott Thompson resigned for lying on his resume, another of the company’s higher-ups has landed in hot water, this time for insider trading.
Robert Kwok, a former senior director of business management at the Internet company, and Reema Shah, a mutual fund manager at Ameriprise Financial Inc., pleaded guilty to one count of conspiracy to commit securities fraud in a Manhattan federal court on Monday.
Prosecutors say Shah bought more than 700,000 Yahoo shares after Kwok tipped her off to an upcoming 2009 partnership between Yahoo and Microsoft. These shares later netted $389,000 in illegal profits. In return, Shah furnished the Yahoo exec with information about the business transactions of other publicly traded companies.
Both Kwok and Shah face up to five years in prison on the insider trading charges. Shah also pleaded guilty to a securities fraud charge, which carries a prison term of up to 20 years. Her sentencing is set for this week, while Kwok’s is scheduled for Sept. 18.
Read more at Reuters.