U.S. Investigating Goldman Analyst on Insider Tips, WSJ Says

U.S. authorities are investigating whether a Goldman Sachs Group Inc. (GS) technology analyst leaked insider information to hedge funds, the Wall Street Journal reported, citing people close to the situation it didn’t name.

Henry King, who is based in Hong Kong, took a leave from his position after traveling to the U.S. earlier this year, Goldman Sachs clients were told, according to the report. Edward Naylor, a Hong Kong-based spokesman for Goldman Sachs, declined to comment on the report when contacted by Bloomberg News today.

Taiwan is home to Foxconn Technology Group, which assembles Apple Inc.’s iPhone, and Taiwan Semiconductor Manufacturing Co., which manufactures for Qualcomm Inc. and Intel Corp. Technology stocks have the largest collective weighting in Taiwan’s Taiex index, with four of the benchmark’s top 10 stocks being technology companies, data compiled by Bloomberg show.

Representatives from the Manhattan U.S. attorney’s office and the Federal Bureau of Investigation declined to comment, the Journal reported. King, co-head of Asia technology research and New York-based Goldman Sachs’s Taiwan research head, didn’t return calls for comment, the newspaper reported.

King covered Hon Hai Precision Industry Co., Lenovo Group Ltd. and Acer Inc., among other companies, according to data compiled by Bloomberg.

Former Goldman Sachs director Rajat Gupta was accused in October by Manhattan U.S. Attorney Preet Bharara of passing inside information to Raj Rajaratnam, the co-founder of Galleon Group LLC. The U.S. says Gupta tipped Rajaratnam about Goldman Sachs and Procter & Gamble Co. earnings. Rajaratnam was convicted of insider trading in May.

Taiwan’s black market for business intelligence and its appeal to hedge funds looking for an advantage are well- established, Bloomberg News reported in 2010.

Since at least 2004, incidents of analysts dealing in confidential chip-production data have occurred at the Taipei offices of JPMorgan Chase & Co. and Lehman Brothers Holdings Inc., said six people in the finance industry with knowledge of the events who asked not to be identified to protect their business relationships.

To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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