Four Insiders Charged With Revealing Product Plans of Apple, Dell, and Others

124309 shimoon filing

Last month, we reported on an investigation by U.S. regulators into inside information on Apple and other companies' product plans being transmitted to research analysts in the form of "channel checks". At the time, the investigation had just yielded its first arrest, an analyst for a research firm known as Primary Global Research, although the analyst did not appear to have a connection to Apple.

The Wall Street Journal now reports that four additional corporate managers who worked with Primary Global Research on the side have also been charged in connection with the investigation. One of those managers, Walter Shimoon, worked for Apple supplier Flextronics and is alleged to have distributed information on the then-unreleased iPhone 4 and iPad.

In their most significant move yet in a sweeping insider-trading investigation, federal prosecutors charged four corporate managers with peddling financial details about prominent technology companies and with leaking secrets about popular consumer products such as Apple Inc.'s iPhone in exchange for cash.

"The information trafficked by the four 'consultants' went way beyond permissible market research," said Janice Fedarcyk, a Federal Bureau of Investigation assistant director in charge. "It was insider information."

Fortune summarizes the key information divulged by Shimoon to a "cooperating witness" for the federal government known as "CW-2".

During this conversation, secretly taped by the FBI and now entered into evidence, Shimoon allegedly gave CW-2 actual third quarter iPhone sales figures -- numbers that wouldn't be publicly released for another two and a half weeks and could, in theory, move the stock.

Then he dropped his two bombshells:

- Apple, he is heard telling CW-2, was "coming out next year" with a new iPhone that's "gonna have two cameras ... It'll be a neat phone because it's gonna have a five-megapixel auto-focus camera and it will have a VGA forward-facing videoconferencing camera." Apple announced the iPhone 4 -- with its two cameras -- eight months later.

- Then he is heard telling CW-2 that "they [Apple] have a code name for something new ... It's ... It's totally ... It's a new category altogether... It doesn't have a camera, what I figured out. So I speculated that it's probably a reader. ... Something like that. Um, let me tell you, it's a very secretive program ... It's called K, K48. That's the internal name. So, you can get, at Apple you can get fired for saying K48." The iPad -- code named K48 -- was unveiled four months later.

According to reports, Shimoon had signed a non-disclosure agreement with respect to his work with Apple through Flextronics, but revealed the information to Primary Global Research, which paid him more than $22,000 for his role as a "consultant" to the firm.

Other corporate managers arrested in conjunction with the information have been alleged to have shared inside information on a number of other companies including Dell, AMD, Seagate, and Western Digital. Federal regulators appear to still be working hard on the case, reportedly working to build cases against even larger Wall Street players including major hedge funds investing in the companies that saw their insider information leaked to outsiders.

Popular Stories

2024 iPhone Boxes Feature

iPhones Could Cost Up to $2,300 in the U.S. Due to Tariffs, Analyst Says

Friday April 4, 2025 9:30 am PDT by
U.S. President Donald Trump on Wednesday announced that steep tariffs will be applied to imports from many countries, starting April 9. The tariffs could have a significant impact on Apple, as the company assembles the majority of iPhones in China, and products imported to the U.S. from China will be subject to a 54% tariff. iPhone prices could increase by up to 43% in the U.S. due to the...
iOS 19 Mock WWDC25 Feature

iOS 19 Expected to Run on These iPhones

Monday March 31, 2025 5:28 pm PDT by
iOS 19 will not be available on the iPhone XR, iPhone XS, or the iPhone XS Max, according a private account on social media site X that has accurately provided information on device compatibility in the past. The iPhone XR, iPhone XS, and iPhone XS Max all have an A12 Bionic chip, so it looks like iOS 19 will discontinue support for that chip. All other iPhones that run iOS 18 are expected...
watchOS 11 Thumb 2 1

Apple Releases watchOS 11.4 With Sleep Alarm Update

Tuesday April 1, 2025 10:34 am PDT by
Apple today released watchOS 11.4, the fourth major update to the operating system that runs on the Apple Watch. watchOS 11.4 is compatible with the Apple Watch Series 6 and later, all Apple Watch Ultra models, and the Apple Watch SE 2. watchOS 11.4 can be downloaded on a connected iPhone by opening up the Apple Watch app and going to General > Software Update. To install the new software,...
iphone 16 pro colors 1

Is Now the Time to Upgrade Apple Devices Before Tariffs Lead to Price Increases?

Friday April 4, 2025 3:41 pm PDT by
If you have an older Apple device that you've been considering upgrading, you're probably wondering how the newly announced tariffs might impact prices going forward, and whether it's worth buying now before there's a price hike. Given analyst and economist responses to the tariffs, market panic, and Trump's stance on the current financial chaos, the answer is that making a purchase...
iPhone 17 Pro 34ths Perspective

iPhone 17 Pro: New 48MP Telephoto Lens May Change How Zoom Works

Thursday April 3, 2025 5:11 am PDT by
Apple is reportedly planning a major upgrade to the Telephoto camera in the iPhone 17 Pro, and while it may seem like a step back on paper, the change could actually improve real-world usability, if one leaker's claims are anything to go by. According to Majin Bu, the iPhone 17 Pro will feature a new Telephoto lens with a 48MP sensor, up from the current 12MP sensor found in the iPhone 16...
iOS 18

Apple Seeds First Beta of iOS 18.5 to Developers

Wednesday April 2, 2025 10:11 am PDT by
Apple today seeded the first betas of upcoming iOS 18.5 and iPadOS 18.5 updates to developers for testing purposes, with the software coming just two days after Apple released iOS 18.4 and iPadOS 18.4. iOS 18.5 and iPadOS 18.5 can be downloaded from the Settings app on a compatible device by going to General > Software Update. We don't yet know what Apple is introducing in the iOS 18.5...
iPhone 17 Pro 34ths Perspective

iPhone 17 Pro Launching Later This Year With These 10 New Features

Sunday March 23, 2025 10:00 am PDT by
While the iPhone 17 Pro and iPhone 17 Pro Max are not expected to launch until September, there are already plenty of rumors about the devices. Below, we recap key changes rumored for the iPhone 17 Pro models as of March 2025: Aluminum frame: iPhone 17 Pro models are rumored to have an aluminum frame, whereas the iPhone 15 Pro and iPhone 16 Pro models have a titanium frame, and the iPhone ...