IBM, Intel Executives Involved in Ongoing Insider Trading Case

The $25 million insider trading scandal that touched such IT heavyweights as AMD, IBM and Intel has now lead to charges against six people from Silicon Valley and Wall Street. The case continues to roil both coasts. Federal prosecutors say executives from IBM, Intel and McKinsey & Co. gave nonpublic information on such companies as AMD, Sun Microsystems, Google, PolyCom and Akamai to two directors at two hedge funds, Galleon Management and New Castle Funds, which used the information to make their trades. Most of the companies are cooperating with investigators, and some – including Intel, McKinsey and Akamai – reportedly are conducting their own internal probes. Intel also put Rajiv Goel, an executive with its treasury department, on administrative leave after the charges were brought against him and five others. Here, eWEEK offers a look at who is involved with the case.

The billionaire founder and managing partner of hedge fund Galleon Management allegedly used inside information about Intel and other companies to make trades. He is free on $100 million bail.

The former head of IBM’s $20 billion hardware business is accused of sharing inside information with New Castle portfolio manager Danielle Chiesi regarding IBM, AMD and Sun. Moffat, who some had considered a possible replacement for IBM CEO Sam Palmisano, is no longer with the IT company.

Federal investigators say she was a friend of Moffat’s who used that relationship to get information on everything from IBM’s finances to IBM’s interest in buying Sun to AMD’s joint venture with ATIC (Advanced Technology Investment Co.) in creating Globalfoundries.

A senior managing director and general partner at New Castle, Kurland allegedly conspired with Chiesi in using the information from Moffat and others to make trades.

A director at McKinsey & Co., Kumar is accused of giving Rajaratnam information regarding AMD’s efforts with ATIC to create Globalfoundries. He has been suspended by McKinsey.

The former CEO at AMD and chairman of Globalfoundries, Ruiz has not been charged in the case nor named in court documents. However, the Wall Street Journal reported that Ruiz was the unnamed “AMD executive” who allegedly gave information to Chiesi regarding the Globalfoundries negotiations. He has stepped down as Globalfoundries chairman, though the company has not linked his resignation to the scandal.

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