Ex-Intel Employee Pleads Guilty to Insider Trading

A former Intel Corp. employee pleaded guilty to making insider trades in shares of Ancor Communications Inc. days before it announced a partnership with the largest computer-chip maker.

Brian E. Pridgeon, 37, admitted using information he obtained while working as an engineer for Intel to gain about $95,000 in unlawful profit, the U.S. attorney’s office in Los Angeles said Tuesday.

Pridgeon learned in 1999 that his employer and Ancor, a computer-switch maker, planned to work together to develop Intel’s Spider chip for use in Ancor’s products.

On Dec. 2, 1999, Pridgeon bought $15,000 worth of call options on Ancor stock. Ancor announced its deal with Intel five days later, and Pridgeon sold the options for about $110,000 after that, officials said.

The San Jose man pleaded guilty to securities fraud and is scheduled to be sentenced Dec. 10. Under the plea agreement, he is expected to be sentenced to 10 months of home detention, prosecutors said. He also faces a Securities and Exchange Commission suit that seeks to force him to give up the profit.

To make the trade, Pridgeon used a brokerage account opened by an acquaintance, Craig Smith. A Los Angeles jury this week convicted Smith of lying to SEC investigators looking into Pridgeon’s trading. Smith, 52, could face up to five years in prison.

But Smith and Pridgeon’s cousin, Stephon Carradine, were acquitted by the same jury of engaging in insider trading. Smith and Carradine own a Century 21 real estate office in Long Beach.