(Adds quote from U.S. Attorney Carmen Ortiz)
By Nate Raymond
Sept 15 (Reuters) - A former wireless retail executive was
sentenced to five months in prison Tuesday for selling
confidential industry information to an analyst whose subsequent
2013 report on sales of BlackBerry Ltd BB.TO 's newest
smartphone sent the company's stock price down.
James Dunham, 60, was also ordered by U.S. District Judge
Douglas Woodlock in Boston to serve five months of home
confinement following his prison term and to pay $76,000, after
pleading guilty in June to wire fraud.
The sentence was confirmed by the office of U.S. Attorney
Carmen Ortiz in Boston and came in the first case spilling out
of its investigations into the black market for secret corporate
information that exists outside of insider trading.
"We will not hesitate to prosecute individuals who buy and
sell confidential corporate information, regardless of whether
there is a provable link to insider trading," Ortiz said.
Dunham, a resident of Glastonbury, Connecticut, was the
former chief operating officer of Wireless Zone, which operates
over 400 franchise Verizon Wireless outlets.
According to prosecutors and court papers, Dunham entered a
secret consulting relationship with an analyst at Boston-based
financial firm Detwiler Fenton in 2010 to provide wireless
industry information in exchange for $2,000 per month.
Prosecutors said the information gave the analyst "real
time" insight into what happened at the franchiser's stores and
was used for research reports sent to investors.
The scheme came to light in April 2013 after Dunham provided
information about a company's new smartphone, prosecutors said.
While not identified in court papers, the manufacturer
matched the description of BlackBerry, whose launch of the Z10
smartphone was considered critical to the troubled company.
Prosecutors said after Dunham told the analyst, Jeff
Johnston, that returns of the phone exceeded sales at some of
the franchiser's stores, Detwiler Fenton issued a report based
on that information.
BlackBerry's stock price subsequently fell 7 percent. The
company disputed the report as "false" and urged regulators to
investigate.
Prosecutors said the information was accurate so far as the
franchiser's stores went, though may not have been with respect
to overall sales and returns.
Dunham's lawyer declined comment. Johnston, who was not
charged, did not respond to requests for comment.
Ortiz's office has continued investigating similar conduct
since Dunham's February arrest.
In July, Brian Bennett, an employee at proxy adviser
Institutional Shareholder Services Inc pleaded guilty to
divulging confidential corporate voting details to a proxy
solicitation firm.
The case is U.S. v. Dunham, U.S. District Court, District of
Massachusetts, No. 15-cr-10110.