Federal agents on Wednesday arrested a former executive at a California 'expert network' firm

The executive, Don Ching Trang Chu, 56 years old, of Somerset, N.J., was arrested before a trip to Taiwan he had scheduled for Sunday, prosecutors said.

Mr. Chu, a naturalized U.S. citizen and Taiwan native, has been charged with one count of conspiracy to commit securities fraud and one count of conspiracy to commit wire fraud and fraud in connection with securities. The first count carries a maximum sentence of five years and the second up to 25 years. Both carry a potential fine of $250,000 or twice the gross gain or loss from the offense, prosecutors said.

Mr. Chu was listed earlier this week as an Asia expert on the website of Primary Global Research LLC. The Mountainview, Calif.-based firm, which was not identified by prosecutors in their complaint against Mr. Chu filed Wednesday, pairs hedge funds and other investment companies with current and former employees at publicly traded corporations to provide insight into their companies and industries.

In a statement Wednesday, Primary Global said Mr. Chu served as the company's Taiwan liaison and had been with the company for about seven years. 'Based upon recent events, PGR has severed its relationship with Mr. Chu,' the company said.

Mr. Chu briefly appeared in Manhattan federal court on Wednesday. He was released on $1 million bail, to be secured by his New Jersey home. He surrendered his passport and his travel was restricted to parts of New York, Pennsylvania and New Jersey.

James R. DeVita, a lawyer for Mr. Chu, declined comment Wednesday.

Prosecutors said Mr. Chu built a relationship in 2008 with Richard Choo-Beng Lee, a hedge-fund manager.

Mr. Lee pleaded guilty and agreed to cooperate with prosecutors in their insider trading investigation of the Galleon Group hedge fund, which resulted in charges against 23 defendants and 14 guilty pleas.

A lawyer for Mr. Lee didn't immediately respond to a request for comment.

Mr. Lee's hedge fund was a client in late 2008 and early 2009 of Mr. Chu's expert-network firm, according to prosecutors. Mr. Chu allegedly provided inside information about public companies directly to Mr. Lee and by arranging conversations for him with consultants who worked at public companies.