Inside-Trader Jiau Sues Over Drug Program Expulsion

Winifred Jiau, convicted of insider- trading crimes last year, sued the federal prison where she is incarcerated over claims she was improperly expelled from a drug-abuse program.

Jiau claimed a substance abuse program staffer at the Dublin, California, prison humiliated her and retaliated against her in response to answers she provided during a “journal group” about her crimes. The staffer said she couldn’t be in the treatment program while appealing her conviction, according to a complaint filed yesterday in federal court in San Francisco.

Jiau said she was an alcoholic seeking help and throwing her out of the program makes her ineligible for early release and deprives her of her constitutional rights.

“Didn’t you profit billions of dollars for hedge funds?” Jiau said she was asked by the staffer on July 2. “There were alleged avoided losses over millions, but no billion-dollar profits,” she said she responded, according to the court filing.

Expulsion

Jiau said she referred the staffer to her attorney for further information about her case and appeal. Her progress in the program was reviewed July 10 “due to lack of participation in community, not completing activities on treatment plan in a timely manner, not processing in groups and refusing to discuss her crime,” according to prison documents in the filing. She was expelled from the program July 25.

She seeks a hearing and reinstatement to the program. A call to the general number at the prison in Dublin, California, wasn’t answered.

Jiau, a former consultant at Primary Global Research LLC, was sentenced in September to four years in prison for selling inside information on technology companies to fund managers who made millions of dollars trading on the tips.

The case is Jiau v. Poole, 12-04193, U.S. District Court, Northern District of California (San Francisco).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net