Source: The Canadian Press

An unidentified employee of Sierra Wireless, Inc. (TSX:SW) has been accused of revealing inside information about the company for a fee to a U.S.-based consultant who helped hedge fund managers learn about corporate information before it became public.

The Vancouver-based company, which makes wireless modems for laptops and other portable devices, didn’t disclose details about the leaked information or the employee, who is apparently one of the people who fed information to consultant Don Ching Trang Chu, also known as Don Chu.

The company didn’t identify the accused employee or describe the person’s responsibilities, other than to say the person isn’t a director or officer of Sierra Wireless. A spokeswoman for Sierra Wireless wouldn’t say if the person is still employed by the company.

The allegations were contained in a complaint filed against Chu in a U.S. district court in New York.

Authorities allege that Chu, of Somerset, N.J., enabled the flow of secrets between publicly traded companies and those who trade their securities.

Authorities said the 56-year-old Chu — arrested on Wednesday and released later on US$1-million bail — was scheduled to depart for Taiwan on Sunday, a trip he made frequently.

An 18-page sworn statement by FBI special agent B.J. Kang, dated Nov. 23, says Chu told FBI agents that a Sierra Wireless employee has met in Taiwan with hedge fund clients and provided information about revenue, average selling price, and design wins — a reference to contracts to supply manufacturers.

The affidavit, which hasn’t been verified in court, said the unidentified Sierra Wireless employee got paid $160 per call with clients of Chu’s firm.

Chu worked for Primary Global Research, based in Mountain View, Calif., with offices in Manhattan and San Francisco.

The charges resulted from information developed after arrests last year in what prosecutors described as the largest hedge fund insider trading bust in history. In that investigation, 14 of 23 people have pleaded guilty to charges and many of them are co-operating, feeding information that was expected to result in additional arrests.

Among those arrested in the probe was Galleon Group funds founder Raj Rajaratnam, a onetime billionnaire who is free on $100 million bail. He has said through his lawyers that he only traded legally, acting on information that was already in the public record.

Chu was charged with one count of conspiracy to commit securities fraud and one count of conspiracy to commit wire fraud and fraud in connection with securities. The charges carry a potential penalty of up to 30 years in prison.

With files from The Associated Press