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Don’t Curse Into FBI Wiretaps
by Paula Schaap ,Senior Reporter , October 19, 2009
The FBI picked up some seemingly damning information from wiretaps in their insider trading case against hedge fund managers and tech industry industry executives.
Not to mention a few four-letter words.
Wiretaps picked up New Castle Partners executive Danielle Chiesi telling an unnamed co-conspirator, “I swear to you in front of God . . . You put me in jail if you talk . . . I’m dead if this leaks. I really am . . . and my career is over. I’ll be like Martha [expletive deleted] Stewart.”
Chiesi was talking about tech company’s Advanced Micro Devices Inc.’s 2008 plans to spin-off its manufacturing division into a joint venture with Abu Dhabi’s Advanced Technology Investment Co., according to court documents. The problem with the conversation, prosecutors allege, was that Chiesi was trading in AMD stock based on insider information.
Chiesi was one of six executives who were arrested Friday and charged with a $20 million insider trading scheme in what the U.S. Attorney in New York said was the largest such case involving a hedge fund.
Also arrested were Raj Rajaratnam, the founder of hedge fund firm Galleon Group, and Mark Kurland, Chiesi’s boss at New Castle. Tech industry executives Robert Moffat, who worked for IBM, Intel Capital’s Rajiv Goel, and Anil Kumar, a director at consulting firm McKinsey & Co. wre also arrested.
Prosecutors said this was one of the first cases of its type where they had used wiretaps. They painted it as a message to Wall Street that they were going to go after white collar criminals with the same tools they used to take down Mob bigwigs and drug dealers.
On another wiretap, the government reported Chiesi as saying she would be meeting with Moffat, “on [expletive deleted] Sunday at my mom’s house. I’m meeting with the [AMD Executive] on Monday, because [the AMD Executive] is meeting with Moffat, with IBM.”
Rajaratnam, who was released on $100 million bail, comes across as less excitable in his wiretaps.
When Chiesi told Rajaratnam that she was glad to talk on a “secure line,” he replied, “I never call you on my cell phone.”
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POLL OF THE WEEK
July 27, 2010
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