Acer Employee, Stockbroker Detained in Insider Trading Probe

An Acer Inc. spokesman and a stockbroker were detained as part of an investigation into alleged insider trading at the computer maker before it announced a record loss last year, Taiwanese authorities said.

A further six people were arrested and released on bail, one person didn’t show up and another agreed to become a prosecution witness after questioning, said Lee Hai-lung, a spokesman for the New Taipei District Prosecutors Office. The 10 suspects made a profit of about NT$5 million ($164,000) using the information, according to Lee.

Shares of Acer fell to a 12-year low on Nov. 6, the day after the company posted a loss of NT$13.1 billion and said Chief Executive Officer J.T. Wang was resigning. The Financial Supervisory Commission, Taiwan’s market regulator, referred stock trading irregularities before the company’s announcement to investigators, Lee said.

Acer is cooperating with an investigation, which included a raid of its offices and the seizure of documents and other relevant materials, the Taipei-based company said in stock exchange filing late yesterday.

The company officials involved knew about Acer’s pending loss and sold personal shareholdings before it was made public, Lee said. Authorities haven’t identified any fault on the part of Acer, he said.

If convicted, the suspects could be jailed a maximum of 10 years and fined as much as NT$200 million, he said.

The criminal probe comes as Chairman Stan Shih and President and CEO Jason Chen implement a plan to rebuild the company into a hardware, software and services provider. A market-share decline for the personal computer maker and asset write-offs prompted Acer to change its leadership.