Taiwan Offers Trove of Insider Data for Hedge Funds

For technology companies, Taiwan is home to the biggest custom producers of chips used in products like Apple’s iPhone and Dell computers. For hedge funds, it’s a cornucopia of confidential data, leaked from chipmakers and parlayed into an edge in trading stocks of their U.S. customers.

The U.S. insider-trading investigation that began last year with the arrest of the head of Galleon Group LLC is shedding new light on this nexus of underground research and offshore manufacturing. Last week, a U.S.-based employee of Taiwan’s biggest chipmaker, moonlighting as a consultant for Primary Global Research LLC, was charged with providing material, nonpublic information to investors. Last month, a Primary Global employee with ties to Taiwan was arrested in the probe.