22 March 2018

IBM exec among six charged over tech insider trading scheme

19 October 2009  |  6948 views  |  0 digital fingerprints

A top IBM executive is among six people charged by US authorities over an alleged $20 million hedge fund insider trading scam involving some of the world's biggest technology companies.

Two criminal complaints filed allege the scheme centred around Sri Lankan billionaire hedge fund manager Raj Rajaratnam, who works at Galleon Group.

Along with Danielle Chiesi, a former Bear employee who now works for the New Castle hedge fund and her colleague Mark Kurland, Rajaratnam is accused of repeatedly trading on material, non-public information.

The information - pertaining to things such as upcoming earnings forecasts and mergers and acquisitions - was given as tips by insiders and others at firms including Intel, IBM, McKinsey and Moody's Investors Services.

Also arrested for their part in the alleged case were Robert Moffat, senior vice president and group executive for IBM's Systems and Technology group, Rajiv Goel, director of strategic investments at Intel Capital and Anil Kumar of McKinsey.

Prosecutors say insider trading took place in stocks of at least 12 companies, including IBM, Sun Microsystems, AMD and Google.

The FBI used court-authorised wiretaps to gather information on the trades, the first time the technology has been used to target Wall Street insider trading.

The Securities and Exchange Commission has also filed civil charges against the six individuals as well as Galleon and New Castle.

Robert Khuzami, director, enforcement division, SEC, says: "What we have uncovered in the trading activities of Raj Rajaratnam is that the secret of his success is not genius trading strategies. He is not the astute study of company fundamentals or marketplace trends that he is widely thought to be. Raj Rajaratnam is not a master of the universe, but rather a master of the rolodex."


IBM's Moffat has been put on leave of absence.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

SEC approves new rules to deal with erroneous trades

SEC approves new rules to deal with erroneous trades

06 October 2009  |  5779 views  |  0 comments
Men charged over $80m ATM Ponzi scheme

Men charged over $80m ATM Ponzi scheme

21 September 2009  |  4903 views  |  0 comments
FBI makes arrests in $80m bank fraud case

FBI makes arrests in $80m bank fraud case

19 August 2009  |  7512 views  |  0 comments
FBI nabs programmer accused of stealing trading code

FBI nabs programmer accused of stealing trading code

06 July 2009  |  12344 views  |  3 comments

Related company news


Related blogs

Create a blog about this story (membership required)
Visit www.nextgenbanking.co.ukvisit www.ebaday.comRegister your place today

Top topics

Most viewed Most shared
hands typing furiouslyBitcoin at 50,000 USD?
13358 views 0 | 5 tweets | 4 linkedin
Can banks be a threat to Big Tech?Can banks be a threat to Big Tech?
10898 views comments | 31 tweets | 40 linkedin
BBVA tests 'invisible payments' technology at inhouse cafeBBVA tests 'invisible payments' technology...
10425 views comments | 14 tweets | 32 linkedin
RBS hatches plan to create digital challenger bankRBS hatches plan to create digital challen...
10218 views comments | 12 tweets | 23 linkedin
Barclays partners seven watch brands for contactless timepiecesBarclays partners seven watch brands for c...
9763 views comments | 14 tweets | 29 linkedin

Featured job

Find your next job