Inventec Appliances execs fail to disclose iPod order cuts, could face prison

Earlier this year, Inventec Appliances (spun off from Inventec Electronics) was raided as prosecutors began looking for evidence to support charges of alleged insider trading, and now it looks like nine of the firm's employees could be headed to the slammer. Taiwan's Banciao District Prosecutors Office "alleged that nine executives and one lower level employee failed to publicly reveal a steep drop in iPod orders until after they had sold off nearly $22.4 million worth of stock," and although the employees knew of the order cuts as early as January 19th, nothing was publicly revealed until mid-March. Purportedly, prosecutors "are seeking the stiffest penalties against the two top executives," and if the evidence sticks, we have all ideas that Inventec will be huntin' a new Chairman (and President, too) in the not-too-distant future.

[Via TUAW]

[Aaron @ Aug 18th 2007 3:41PM]

It's wrong, of course, but damn, it would be hard to resist seeing the opportunity to make that much and not act on it...

[Homeboy @ Aug 18th 2007 7:07PM]

I agree. But it you are going to engage in insider trading you have to do it a smart way. Sell the stocks and announce what's going on shortly after. They kept their mouth shut and spill the beans almost two months later.

It's like a relationship. If you cheap on your girl friend by making out with another girl she might forgive you if you tell her about it right away.

[Papito @ Aug 18th 2007 5:04PM]

Rather face Taiwanese prosecution and jail than face Steve.

[Renato Fontes @ Aug 18th 2007 5:06PM]

erm... can someone explain it in easier words? xD
my english isn't good enough to understand it

^^;

[Kurian @ Aug 18th 2007 5:28PM]

The company manufactures iPods. They recently stopped receiving orders for iPods. The ppl working in the company obviously knew that iPod orders had been stopped. If they told the other shareholders about this, then everyone will sell their share and the value of the company will crash. So they didnt mention anything and the company's value remained the same. But the ppl who knew about the stopped orders sold their shares as soon as they heard about it before the information got out, so they wouldnt be affected by the crash.

By law, ur not supposed to take advantage of your inside information like this.

[bob e @ Aug 18th 2007 5:23PM]

Does this mean iPod sales are plummeting?

Has the public had enough iPods?

Will the Zune make up the difference?

[zorg @ Aug 18th 2007 6:04PM]

Wow, "bob e," what a great detective you are! iPod sales must be plummeting because why else would Inventec be going down the tubes?

It couldn't be that Asustek or Foxconn has beaten them for Apple orders, could it? I shouldn't, like, Google iPod suppliers to find out, should I?

I should just dump Apple stock for Zune stock as fast as I can! Brown Zunes especially going to skyrocket ... arrgghh ... must reach sarcast-o-meter ... fading ... okay, got it. There. Better now.

[Xander @ Aug 20th 2007 4:09AM]

I think he was being sarcastic

[Tim @ Aug 20th 2007 2:01PM]

Well... no, quite the opposite. Selling their shares immediately before making the announcement would be about the stupidest thing they could do (short of buying puts right before the announcement). Assuming the allegations are true, they probably felt that they had waited long enough for the SEC not to investigate the sales.

[DickHardknocks @ Aug 19th 2007 12:23AM]

I love how GREEDY CORPORATIONS can't be happy with their millions and always desire to scam the "sheeple" just a little bit more.

Someday the proletariat will rise up against them...burn their Mercedes Benz S-classes, firebomb their beach front homes, level their summer homes and CHAINSAW THEM IN HALF.

I can't wait till none of them can live in peace...

every morning ride to work will be through hails of bullets fired by the underclass.