All Blog Posts from Econwatch

A prominent executive in the technology industry has been implicated in the alleged $20 million insider trading case unraveled by investigators earlier this month, according to a Wall Street Journal report ($) Wednesday.

Hector Ruiz, then-chairman and former chief executive of chipmaker Advanced Micro Devices, was the unnamed AMD executive that fed inside information to Danielle Chiesi, one of the six arrested in the case, according to a person familiar with the matter. Chiesi worked at hedge fund Newcastle Partners during the alleged insider trading.

Court filings indicate an unnamed executive at AMD told Chiesi about confidential plans to reorganize AMD in 2008. Chiesi then shared that information with Raj Rajaratnam, the billionaire co-founder of Galleon Group also charged with insider trading. New Castle and Galleon bought up shares of AMD just prior to the transaction, but their potential profits were hurt by the general downturn in the market last fall.

Ruiz, a highly respected executive in the technology sector, is not charged in the case and the complaint doesn't say that he personally profited from passing along the information.

The six arrested deny the charges.

Meanwhile, Galleon Group is close to completing its wind down in light of the allegations, liquidating more than 90 percent of its $3.7 billion hedge fund holdings.

Read full post…

Raj Rajaratnam, the alleged billionaire ringleader of a massive insider trading scheme, was a hard-driving boss who was insisted his traders and analysts always have an edge over the competition, according to recently published reports.

According to Bloomberg, Rajaratnam gathered Galleon Group's 70 analysts, portfolio managers and traders every morning and peppered them with questions, expecting them to have better information than their competitors. As the report notes, that quest for a money-making edges is what has landed Rajaratnam in jail.

Rajaratnam was among six arrested Friday on insider trading charges. Prosecutors allege the group, which included executives at IBM, Intel, McKinsey & Co. and Bear Stearns traded insider information with Rajaratnam, who alone faces 13 charges of fraud and conspiracy.

A Wall Street Journal report depicts Galleon Group as a high-pressure environment in which investors and analysts were berated if they failed to get enough information, though the pressure was usually directly applied by executives other than Rajaratnam.

"Get an edge or you're gone," a former trader told the Journal. "Galleon is looking for that little bit of extra edge. That's what the firm is about."

Read full post…