Secret iPad K48 Supplier Probed for Possible Securities Fraud

According to a criminal complaint filed by the United Staes Attorney’s office, an Apple supplier has been involved in a conspiracy to commit securities fraud. In the complaint, Flextronics employee Walter Shimoon is accused of divulging “material nonpublic information” about Apple’s iPhone and iPad to an analyst at a  hedge fund in New York City.

The FBI secretly recorded Shimoon as he allegedly told the analyst, who is now a “cooperating witness”,  details about Apple iPhone sales numbers weeks before Apple disclosed their quarterly financial results to the public.

Apple is know for their tight secrecy around new products. Someone with inside information on what Apple might be launching next could prove very valuable to someone looking to make a quick buck off of Apple’s stock.

The complaint is filled with interesting information on what the Flextronics supplier revealed, including details about the not yet released iPhone 4 and  iPad.  Shimoon is reported to have informed the witness that the iPhone 4 was “coming out early next year” and that “it’ll be a neat phone ’cause it’s gonna have five-megapixel auto-focus camera and it will have a VGA forward-facing video conferencing camera.”

The recording also captured a conversation about Apple’s new iPad.  “They [Apple] have a code name for something new…it’s a new category altogether. And, uh, I speculate, it doesn’t have a camera in it, what I figured out. So I speculated that it’s probably a reader…Yeah, I believe it’s called K, K48. That’s the internal name…So you can get, at Apple you can get fired for saying K48…outside of a, you know, outside of a meeting that doesn’t have K48 people in it. That’s how crazy they are about it.”

Shimoon faces multiple charges and until he was fired last month, was doing business development for Flextronics.  Flextronics is one of Apple’s main suppliers and does work on iPhone, iPad and iPod products.

If you’re interested, checkout the full criminal complaint and scroll down to page 27 to read where Shimoon spills the beans on various Apple products.

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