Jury convicts hedge fund tipster Jiau in just hours (Reuters)

NEW YORK (Reuters) – A jury took only 6-1/2 hours to convict former technology company consultant Winifred Jiau of insider trading charges on Monday after a trial that the panel's forewoman described as leaving her in despair about corruption at some hedge funds.

Taiwan-born Jiau -- the first consultant for firms that match business experts with hedge funds to go to trial in a U.S. crackdown on suspicious Wall Street trading -- was convicted of securities fraud and conspiracy to gain an illegal market edge for herself and her clients.

"We really learned about this unfair system to see how a person's life could be changed on a dime, even a person who is not one of the big hedge fund guys," the forewoman of the 12-member jury, Susan Kohlmeyer, told reporters outside the Manhattan federal courtroom.

"I hope that hedge funds will be re-examined. There's a lot of corruption. I was full of despair; I lost my appetite for three weeks," said Kohlmeyer, an art teacher from the suburbs in Westchester County north of New York City.

The jury deliberated for five hours on Friday and 90 minutes on Monday in the third trial since March as part of what federal prosecutors call the biggest probe of insider trading at hedge funds on record, punctuated by the extensive use of FBI wiretaps.

In May, a jury convicted once-high-flying Galleon Group hedge fund founder Raj Rajaratnam after a two month-long trial and on June 13, three former securities traders were convicted in an overlapping insider trading ring.

Jiau's lawyer, Joanna Hendon, told reporters after the verdict that her client would appeal. The lawyer had argued in Jiau's defense that the information she shared was not material to the trading by hedge funds.

CODED INSTANT MESSAGES

Prosecution evidence of instant messages at the nearly three week-long trial showed that Jiau referred to her sources in the finance departments of chipmakers Marvell Technology Group Ltd and Nvidia Corp as "cooks," to money as "sugar," and to confidential information as "recipes."

The petite, bespectacled Jiau, 43, lived alone with her dog in Fremont, California, before being arrested last December. She was denied bail and faces up to 25 years in prison when she is sentenced by U.S. District Judge Jed Rakoff on September 21.

Nicknamed "Wini" or "Poohster" by her co-conspirators, Jiau was paid $208,000 over two years by so-called expert network firm Primary Global Research (PGR), the jury heard.

Prosecutors accused several people linked to firms such as PGR of breaching their fiduciary duties by trafficking in confidential, inside data.

A former executive of PGR, James Fleishman, is scheduled to go on trial in the same courtroom at the end of August.

The payments to Jiau were arranged by at least two people she tipped in advance about the chipmakers' earnings in 2008, providing precise financial information that they traded upon.

One was former SAC Capital Advisors LP analyst Noah Freeman, who pleaded guilty and testified against her. The other was Samir Barai, founder of Barai Capital Management.

SAC was not accused of any wrongdoing.

Jiau chose to fight the charges while more than a dozen others, including Barai and his former research analyst, Jason Pflaum, admitted crimes or agreed to assist the investigations in hopes of lighter sentences.

"Wini Jiau gave new meaning to the concept of social networking," Manhattan U.S. Attorney Preet Bharara said in a statement after the verdict. "She used and exploited friends at public companies ... Another link in a corrupt network has been broken."

A onetime friend and former Nvidia financial analyst, Sonny Nguyen, pleaded guilty and testified about how she cultivated him to leak corporate secrets. But she never told him or another friend at Marvell that she was sharing the information with hedge funds and being paid by PGR.

"She provided the information to the decimal. That's unheard of. It was a very simple case," said juror Parbodh Sharma, 55, of Riverdale, New York.

The case is USA v Winifred Jiau et al, U.S. District Court for the Southern District of New York, No. 11-00161.

(Additional reporting by Jonathan Stempel, editing by Dave Zimmerman and Gerald E. McCormick)

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Jury convicts Ariz. inmate who sparked manhunt (AP)

KINGMAN, Ariz. – An Arizona inmate whose escape sparked a three-week national manhunt was convicted Friday of breaking out of prison and abducting two truck drivers whose big rig was used as a getaway vehicle.

A Mohave County jury found 46-year-old John McCluskey guilty of escape, kidnapping, aggravated assault and other charges in his July 30 break from the medium-security Arizona State Prison in Golden Valley. Authorities said McCluskey, a second inmate and their accomplice went on to kill an Oklahoma couple traveling in New Mexico on a camping trip.

Mohave County Superior Court Judge Steven Conn is set to sentence McCluskey on Friday afternoon. The range of sentences that McCluskey could face was unclear.

Prosecutors said McCluskey and two other inmates escaped with the help of Casslyn Welch, who threw cutting tools onto the prison grounds and supplied the men with guns, money and a vehicle.

After one inmate left alone in the vehicle, police say McCluskey, Tracy Province and Welch kidnapped two truck drivers at gunpoint. The drivers later were released.

McCluskey, Province and Welch ended up in New Mexico, where they face federal murder and carjacking charges in the Aug. 2 deaths of Gary and Linda Haas of Tecumseh, Okla.

Inmate Daniel Renwick, who made off alone in the vehicle Welch had provided, was the first to be captured after a shootout in Colorado a day after the escape. Province was found in Wyoming on Aug. 9.

Welch and McCluskey were arrested more than a week later at an eastern Arizona campsite after an alert U.S. Forest Service employee spotted their beat-up Nissan backed suspiciously into the trees.

Welch, Province and Renwick already have resolved their Arizona charges. Renwick pleaded guilty to two counts of first-degree attempted murder in the Colorado case and was sentenced to 60 years behind bars.

The escape cast a critical spotlight on Arizona's prison system. A report revealed a series of security breakdowns at the prison, including alarms that went off so often that prison personnel just ignored them. The prison warden and a security official resigned.

Since then, Arizona officials said a new alarm system was installed, staff training and testing have increased and more state employees are monitoring the private prison staff.

McCluskey had been serving a 15-year prison term for attempted second-degree murder, aggravated assault and discharge of a firearm when he escaped. He previously did time in Pennsylvania related to a string of armed robberies in the 1990s.

Prosecutors said guards had been extra alert around McCluskey because he tried to head butt a sheriff's detective and because authorities found a makeshift weapon in his cell. He was required to wear a stun belt during the trial.

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Jury convicts Ohio mom in baby's microwave death (AP)

DAYTON, Ohio – Jurors in an Ohio woman's third trial found her guilty Friday of killing her baby daughter by cooking her in a microwave oven.

China Arnold was convicted of aggravated murder in the death of 28-day-old Paris Talley in August 2005. Arnold could receive the death penalty. The sentencing phase will begin Monday.

Arnold's first trial ended in a mistrial. She was found guilty in the second trial, but that conviction was reversed last fall. An appeals court found there was misconduct by prosecutors and that the trial court made an error by not allowing a material witness to testify in Arnold's defense.

Prosecutors have said Arnold, 31, intentionally put the baby in the microwave after a fight with her boyfriend. The defense had argued that someone else was responsible.

Medical experts testified that the baby died after her temperature reached 107 to 108 degrees Fahrenheit and that she probably was in the microwave for more than two minutes, dying quickly afterward.

"She died because she was overheated," said Dr. Marcella Fierro, retired chief medical examiner for Virginia. "She was cooked."

Messages seeking comment from the prosecutor and defense attorney were left at their offices, but a gag order in the case prevents anyone connected to it from commenting outside court.

Assistant Prosecutor Dan Brandt told jurors in court that Arnold's actions were "even more purposeful" than a slaying with a gun or knife, the Dayton Daily News reported.

"Baby Paris is without life, but she's not without a voice," Brandt told jurors in closing arguments. "Please listen to her."

Brandt said that Arnold had to carry the baby over, place her in the microwave, shut the door and press buttons. Then she waited while her child cooked to death, Brandt said.

Defense attorney Jon Paul Rion argued that the evidence pointed as much to Terrell Talley, the baby's father, as it did Arnold.

"This doesn't make sense to you," Rion told jurors. "It doesn't. I've been watching your faces."

The prosecutor cut and fit evidence to show "this loving mother somehow was so evil that she killed her baby in this way," he said.

Rion said Talley's testimony that Arnold said "I killed my baby" left out important context: She only meant that she failed as a mother by allowing the crime to happen and not that she killed her child.

The defense attorney also said that Talley's sneakers were stained with a bodily substance that should have been tested.

Arnold also was very intoxicated, Rion said.

"No mother is going to do this, in this way," Rion said. "China Arnold is innocent of these charges."

Brandt said that Arnold admitted to police that the baby woke her up and that she was alone, beside her other sleeping children. There also were no signs of a break-in, he said.

"She eliminated everyone else," Brandt said.

Talley testified Arnold was drunk, but not so drunk that she would not know what happened. He said she told him the baby would still be alive if he hadn't been unfaithful to her.

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