An employee at an Apple parts supplier has been caught on tape selling inside information about Apple to a hedge fund broker. The information, potentially worth millions to the broker, was sold by Walter Shimoon for a mere $22,000. Shimoon has since been fired by camera and charger component maker Flextronics International, and was arrested by US law enforcement this morning. Among other things, he was recorded leaking sales information, details about the iPhone's cameras and about a mysterious product known only as "K48."
Shimoon, who played a role in contract negotiations with Apple, is alleged to have passed information via phone calls with clients of Primary Global Research, an expert-networking company based in California. One of the people he was talking to, however, was a government witness who was recording the phone calls. According to the recordings, Shimoon revealed third quarter 2009 sales figures for iPhones and fourth quarter 2009 sales figures for iPods during a phone call in October 2009. During this call, Shimoon also let drop the news that the 2010 iPhone would have two cameras. "We're working with them on the camera," Shimoon said, according to the complaint against him. "You know, they're very secretive."
In the same phone call, Shimoon also revealed that Apple was working on a top secret product, which was known internally at the company as "K48." His information about the new product was sketchy, Shimoon explained, but he made some educated guesses that turned out to be pretty accurate: "It's totally … It's a new category altogether… It doesn't have a camera, what I figured out. So I speculated that it's probably a reader… Something like that. Um, let me tell you, it's a very secretive program," he said. Shimoon also added that "at Apple you can get fired for saying K48… that's how crazy they are about it."
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