In a globalized economy, the sins of one region can easily be exported to another. Consider Taiwan, which has become an important country when it comes to the chips necessary to power a wide range of devices made by the likes of Apple and Dell. In addition to the recent arrest of Don Chu, a consultant for Primary Global Research, there have been a string of incidents in which material, nonpublic information was said to have changed hands, Bloomberg reports. Previous incidents typically involved analysts who sought confidential chip-production data and trafficked them "at the Taipei offices of banks including JPMorgan Chase and Lehman Brothers Holdings."

The rise of a robust semiconductor industry in Taiwan has created demand for information about these fabs, and how much they are producing for big-name clients in the U.S. In one example, "Lehman Brothers' compliance team received reports that a Taiwan technology analyst was getting TSMC production data and passing it on to selective clients," notes Bloomberg.

"Two compliance officers flew in to investigate and concluded there was no breach of policy, according to three people familiar with the matter, who declined to be identified because the probe was confidential. The investigators found such activity so common in Taiwan that no clear distinction could be made between legitimate research and insider trading."

The financial news service notes a recent shift in this intelligence black market, as sell-side analysts have pulled back and expert network consultants have moved in.

Consider one of the recently arrested, Manosha Karunatilaka, an account manager at TSMC's office in Burlington, Mass., who moonlighted for Primary Global. Karunatilaka "began talking to clients of Primary Global in September 2008, according to the complaint filed when he was arrested on Dec. 16." Prosecutors said Karunatilaka provided inside information to a second cooperating witness in the U.S. investigation. "Karunatilaka received production reports on the foundry's top 10 customers, and was paid $200 per call to consult with Primary Global clients, prosecutors said in the complaint," according to Bloomberg.

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