Six charged with insider trading involving Google, Intel and IBM
By Mike Ferro
Six individuals will be facing charges by Federal prosecutors for insider-trading. The insider-trading scheme involves some of the biggest tech companies in the world such as Intel, Google and IBM. Some of the individuals involved in the scheme are also well known throughout the tech industry.
According to CNET, Raj Rajaratnam of Galleon Group was identified as one of the participants in the insider-trading scheme and charged with 13 counts of securities fraud and conspiracy. Raj Rajaratnam is a well known, self-made billionaire and was featured in Forbes Magazine as the 236th richest American netting $1.8 billion. He is also the founder of the Galleon Group, which is one of the world’s largest hedge funds.
A similar charge was lodged against two employees within New Castle Partners, which is another large hedge fund. Shockingly, Robert Moffat, senior VP and group executive of IBM was also charged with insider trading. Rajiv Goel of Intel and Anil Kumar of McKinsey were also charged as well.
Apparently, Rajaratnam received information about strategic investments that Intel and other companies were about to make from the co-conspirators. In turn the two hedge fund companies leveraged the information to trade in share resulting in millions of dollars in profits.
There are also reports that the members of the scheme used insider information to offload Google stocks before the earnings results were released resulting in a quick profit of $8 million. There were shares from several other companies that were involved in the insider trading scheme. The FBI is continuing to further investigate the matter in order to identify all of the key players.
It really is amazing that these individuals were involved in such blatant acts of security violation as it really is something that can be highly transparent. Unfortunately, It seems like hedge fund companies have quickly turned into a cesspool for insider trading.
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Read more entries by Mike Ferro.
Stumble It!
October 19th, 2009
Quickly? Its been that way for years, where ya been?
November 1st, 2009
I agree that hedge fund companies have been shady front practices for insider trading in the past but proponents have always argued big companies like Galleon proved otherwise for the majority.
With big companies like Galleon and New Castle pt. implicated in insider trading, the whole concept is quickly coming under question.