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A federal jury has convicted an Nvidia Corp. engineer on charges of securities fraud, lying to authorities and obstruction of justice.

Atul Bhagat, 29, of Mountain View, was among six of the Santa Clara chipmaker's employees who were criminally indicted on charges of illegally profiting by using insider information.

Three have struck a plea deal with prosecutors and two are awaiting trial.

"The U.S. attorney's office has made insider trading one of its priorities .

. . and it's our hope that the message is going out to the business community that insider trading and securities fraud will be criminally prosecuted," spokesman Matthew Jacobs said yesterday.

The four-week trial ended Thursday after the jury had deliberated nine hours. Bhagat was found guilty on two counts of securities fraud, three counts of making false statements to the Securities and Exchange Commission, and obstruction of justice. His sentencing was set for June 3.

The criminal charges were filed as part of a wider SEC investigation of employees and acquaintances who may have illegally profited by using information from an e-mail sent by Nvidia Chief Executive Officer Jen-Hsun Huang.

News source: SF Gate - Nvidia engineer convicted of fraud

In a companywide memo on March 5, 2000, Huang said the firm had won a lucrative contract to supply graphics chips for Microsoft's Xbox game console. Nvidia shares soared in the following days and weeks as rumors of the deal rippled through Wall Street.

In a telephone interview with The Chronicle, Bhagat admitted that he purchased 1,000 shares the following day but said he didn't know about the Microsoft deal, because he opened the e-mail after he purchased the shares.

"Mr. Huang sent an e-mail midnight on Sunday night. . . . Me and my wife had been looking for houses during that time, and the following morning, I was looking at properties online and I also traded stocks at the same time," he said. "It was after lunch I opened the e-mail."

Bhagat, who immigrated to the United States a decade ago from India, said he feels "persecuted by the U.S. government."

"I came to this country and enrolled at the University of Kentucky with $800 in my pocket. I worked delivering newspapers and pizzas putting myself through school. And now this," said Bhagat, who is married to a school teacher and has a 10-month-old son.

He later earned a master's degree in electrical engineering at Stanford University and landed a job at Sun Microsystems, where he remained for about three years before becoming a hardware engineer at Nvidia in January 2000. He remained on paid leave yesterday but figures that he will be fired now that there's a conviction.

"These guys want to ruin my life for 1,000 shares that I bought on speculation, not on insider information," he said. "I'm going to fight hard." Bhagat said he made $48,000 profit from the purchase but ended up spending more than $250,000 to defend himself in the case.

Bhagat said he will appeal the verdict. He spent yesterday afternoon writing an eight-page letter to U.S. District Judge Ronald M. Whyte, appealing his case.

"In early 2000, everybody was trading stocks, and I was, too, and Nvidia happened to be one of the purchases on that day. And here I am, a convicted felon," he said.