James Dunham, Selling Confidential Financial Information, Massachusetts 2023

Former Wireless Executive Charged with Selling Confidential Financial Information

BOSTON, MA – May 22, 2023 – James Dunham, a 59-year-old former executive from Glastonbury, Connecticut, was arrested today on charges of mail fraud and wire fraud in connection with the sale of confidential business information to a Boston-based financial services firm.

According to a federal complaint, Dunham, who previously served as the Chief Operating Officer (COO) of a major wireless service provider’s retailer, had access to sensitive information regarding sales, compensation, and product launches at the company’s 400 locations. For over three years, Dunham secretly worked with the financial services firm, providing confidential information in exchange for a monthly payment of $2,000.

The complaint alleges that Dunham was the source of information for seven research notes prepared and distributed by the financial services firm, including details about product launches, new subscribers, and sales and return information for specific smartphones. Notably, an April 11, 2013, research note reported that product returns were exceeding sales for a particular smartphone, leading to a 7% drop in the stock price of the manufacturer on the same day.

“The black market for business secrets continues to flourish,” said United States Attorney Carmen M. Ortiz. “Sometimes business secrets are sold for use in insider trading; sometimes they are used for other improper purposes. But the sale of confidential business information by corporate insiders—in violation of their duties to employers, business partners, customers, and shareholders—is always wrong and illegal.”

Dunham faces a maximum sentence of 20 years in prison, three years of supervised release, and a fine of the greater of $250,000 or twice the gross gain or loss. The case was investigated by the Federal Bureau of Investigation, Boston Field Division, and the United States Attorney’s Office received valuable assistance from the Securities & Exchange Commission.

The details contained in the complaint are allegations. The defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law. James Dunham is scheduled to appear in U.S. District Court in Boston at 2:45 p.m. today before Chief Magistrate Judge Jennifer C. Boal.

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