14 Charged In Tech Insider Trading Case

Investigators expand probe into securities fraud ring that penetrated major IT vendors.



Federal authorities on Thursday charged 14 more individuals with insider trading in a case that has already touched the upper echelons of blue chip tech firms like IBM, Intel, and AMD.

Among those charged Thursday were a vice president at wireless chipmaker Atheros, a once prominent Wall Street tech analyst, a former Moody's analyst, and a former Intel employee who's alleged to have provided insider information on Google's earnings to the scam's ringleaders.

"When Wall Street professionals or others exploit inside information for an illegal tip-and-trade binge, they undermine the level playing field that is fundamental to our capital markets," said Robert Khuzami, director of the Division of Enforcement at the SEC, which brought the charges.

The individuals named in the SEC's enforcement action are also facing criminal charges that were brought simultaneously by the U.S. Attorney for New York.

Atheros VP Ali Hariri is alleged to have provided an accomplice at a hedge fund with inside information on the company's earnings. Hariri was no longer listed on Atheros' Web site, as of Thursday.

Former Moody's analyst Deep Shah is alleged to have provided insider information related to takeovers of Hilton and personnel management systems vendor Kronos, while hedge fund consultant and former Intel worker Roomy Khan allegedly offered inside tips on Google's earnings that were obtained "from unnamed sources," according to the SEC.

Steven Fortuna, who was mostly recently with S2 Capital, was charged with, and pled guilty to, providing inside information on one company's quarterly earnings and also on AMD's plans to spin off its manufacturing unit.

The scandal broke last month, when the SEC and federal prosecutors announced the arrests of prominent hedge fund operator Raj Rajaratnam, who ran the multi-billion dollar Galleon group. Included in the initial round of arrests were IBM senior VP Robert Moffat, and Intel managing director Rajiv Goel. Moffat resigned from IBM earlier this week.

Also caught up in the scandal was former AMD CEO and current Globalfoundries chairman Hector Ruiz, who stepped down from his role at Globalfoundries this week after published reports identified him as a tipster whose information ultimately made its way to Galleon's Rajaratnam.

Other charges announced Thursday were against Zvi Goffer, who operates trading firm Incremental Capital, as well as Incremental's Emanuel Goffer, David Plate, and Michael Kimelman, Arthur Cutillo, an attorney at Ropes & Gray, New York-based attorney Jason Goldfarb, Craig Drimal, who worked in Galleon's offices, Ali Far and Richard Choo-Beng Lee, of Spherix Capital, and Gautham Shankar, a trader at Schottenfeld in New York.

Trial dates have not been set.

InformationWeek has published an in-depth report on Sun's future under Oracle. Download the report here (registration required).

Comment  | 
Email This  | 
Print  | 
RSS
More Insights
Copyright © 2019 UBM Electronics, A UBM company, All rights reserved. Privacy Policy | Terms of Service