Danielle Chiesi, a key player in the insider trading case that nabbed executives from IBM and Intel, pleaded guilty to three counts of conspiracy and faces up to four years in prison.
Danielle Chiesi, a central figure in the massive insider trading scandal
that included a long-time IBM executive, faces up to four years in prison after
pleading guilty to conspiracy charges in U.S. District Court.
who was one of 24 people arrested in October 2009 in connection with the
insider trading case that investigators alleged generated more than $25 million
in illegal gains, admitted to passing on nonpublic information about various
companies-including IBM, Advanced Micro Devices, Sun Microsystems and Lenovo-to
her colleagues at hedge fund New CastleFunds. She also admitted to giving
information to Raj Rajaratnam, co-founder of the Galleon Group hedge fund and
the central figure in the case.
is scheduled to go on trial next month.
a hearing in U.S. District Court in New York Jan. 19, Chiesi admitted to
"crossing the line" through her actions, and said she was taking "full
to a Reuters report
am deeply ashamed by what I did," Chiesi told the court, according to
Reuters. "By crossing the line on those occasions, I ruined a 20-year
career in my field and brought disrepute to what was an honorable
was the 17th
person charged in the case to plead guilty. She pleaded
to three counts of conspiracy to commit securities fraud.
guilty plea came four
months after Robert Moffat
, who spent 31 years with IBM and with whom
Chiesi had a person relationship, was sentenced to six months in prison.
Moffat, who at the time of his arrest was senior vice president and group
executive of IBM's $20 billion Systems and Technology Group, admitted to
passing information onto Chiesi about IBM finances and its pursuit of Sun,
Lenovo financial figures and AMD's efforts to spin off its manufacturing
business to create what is now Globalfoundries.
left IBM soon after his arrest.
number of other high-tech executives also were arrested in connection with the
case, while former AMD CEO Hector Ruiz-while not charged-has been named in
published reports as a figure in the case.
significance of the case was not only the scope-in terms of money and
people-but also the use by federal investigators of wiretapping technology,
more commonly found in investigations of organized crime. Rajaratnam, Chiesi
and Moffat-among others-were taped discussing non-public information, according
to court papers.
agencies-including the Securities and Exchange Commission, U.S. Attorney's
Office and FBI-are aggressively going after such insider trading cases. For
example, in December 2010, former
employees at Dell, AMD
and Taiwan Semiconductor Manufacturing Co. were
among those arrested in connection with an insider trading case that involved
the employees also working as consultants to outside networking firms.
these firms paid the technology company employees hundreds of thousands of
dollars to work as consultants, in exchange for insider information on their