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Ex-Primary Global Exec’s Conspiracy Conviction Upheld

Jan. 8 (Bloomberg) -- Former Primary Global Research LLC executive James Fleishman’s 2011 conviction for being part of an insider-trading scheme to help pass confidential information on publicly traded companies to fund managers was upheld today by a federal appeals court in Manhattan.

Fleishman, 43, was convicted after trial in federal court in New York of two separate conspiracy charges for what the U.S. said was a scheme to obtain and pass along confidential information from technology company employees who moonlighted as consultants for Primary Global, a so-called expert-networking firm.

The tips were passed to fund managers who paid Mountain View, California-based Primary Global thousands of dollars for consultation calls with company insiders, prosecutors said. Fleishman is serving a 2 1/2-year term at the federal prison in Florence, Colorado.

In their ruling, the appeals court rejected Fleishman’s argument that his right to testify at trial was “impermissibly chilled” by a government subpoena that required him to produce all of his personal diaries if he took the stand in his own defense.

“Given that Fleishman would have offered testimony that would constitute a denial both of there being any conspiratorial agreement and of his having any intent to violate the law, we cannot conclude that Fleishman’s constitutional rights were violated by requiring him to turn over what context suggests are business records,” the appeals court said in the ruling.

Wiretaps Upheld

The appeals panel also upheld the government’s use of court-authorized wiretaps that the Federal Bureau of Investigation made during the investigation of a so-called trunk line which Primary Global used to facilitate calls between networking consultants and fund managers.

During the investigation the FBI was able to intercept 104 users of the telephone line and prosecutors in the Manhattan U.S. Attorney’s office used some excerpts of the calls as evidence they presented during the trial.

Fleishman had argued that the trial judge had erred by improperly failing to suppress the fruits of wiretaps on the phone lines because the government’s application for a court-authorized wiretap failed to establish that investigators had probable cause to believe crimes were being committed on all users of the lines and instead the government had eavesdropped on 104 individual users, when 93 of them weren’t “target subjects.”

Fair Trial

Fleishman had also asked for a new trial, saying that U.S. District Judge Jed Rakoff, who presided over the trial, had committed so many errors that together they deprived him of a fair trial.

The appeals court rejected those arguments.

“The district court did not err in authorizing the wiretaps,” the panel said. “The law from this circuit does not support Fleishman’s constitutional arguments as they relate to ‘trunk lines’ and the Fourth Circuit case on which he relies does not stand for the robust proposition he asserts. We have considered appellants remaining arguments and, after a thorough review of the record, find them to be without merit.”

His lawyer, Benjamin Coleman, didn’t return a voice-mail message seeking comment on the case.

The case was brought as part of a U.S. crackdown on insider-trading involving expert-networking firms who matched company insiders with fund managers willing to pay for nonpublic information about technology companies for a fee.

The lower court case is U.S. v. Nguyen, 11-cr-32, U.S. District Court, Southern District of New York (Manhattan) the appeals case is U.S. v. Nguyen, 12-94, 2nd U.S. Circuit Court of Appeals (Manhattan).

To contact the reporters on this story: Patricia Hurtado in New York at; Bob Van Voris in New York at

To contact the editor responsible for this story: Michael Hytha at

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