Etron chair charged with insider trading

Lu and Liao are accused of selling 3 million Etron shares between Feb. 27, 2006, and March 14, 2006, after learning that the company’s gross margin had almost halved in the month to January 2006, according to a faxed statement sent yesterday by Lin Chin-chun, a spokesman for the prosecutors’ office. Lu and Liao haven’t received a copy of the indictment, Chris Liang, a spokeswoman for Etron, said by phone.

The shares were sold by the executives before Hsinchu, Taiwan-based Etron reported gross margin figures for each of the first three months of 2006 in a filing to the Taiwan Stock Exchange in April 2006, the prosecutors said in the statement.

Shares of Etron, a semiconductor designer, fell by the daily limit for three straight days in April 2006. The couple avoided a loss of NT$18.5 million (US$611,207) by selling the stock prior to informing the public, according to the prosecutors’ statement. Lu and his wife will seek to clear their names by presenting evidence to the court after receiving the indictment, Etron said in a filing to the stock exchange yesterday. “The company’s comment remains the same as what we put out last night,” Etron’s Liang said today. Etron fell by the 7 percent daily limit to NT$26.05 at the end of trading in Taipei. The island’s benchmark Taiex index gained 1.6 percent.

Prosecutors searched Etron’s office on June 6, 2007, the company said in a statement to the Taiwan Stock Exchange the next day. Etron will cooperate with the investigation and has provided full disclosure in annual and quarterly reports, it said at that time.

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