HFN Login and Registration
LOGIN PASSWORD
Need Help? Register here
Skip Navigation Links
Home
About HFN
News
Funds
Investor Tools
Manager Services
Data Services
Research
Service Providers
Conferences
Help
HedgeFund.net: Public news from HedgeNews
Sign Up for the HFN Daily Newsletter         |    Take a Tour of the HFN Website    |    Register      |         Login
Hedgefund.net Register Here
Click below for information on membership options
Premium Access Manager Services Data Services
Asset Flow Report View Front Page  

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.”


  
Recent Articles 
Poll Of the Week
  Poll of the Week
by HedgeNews Editors , January 28, 2010
 
 
2 Comments
Post your comments below.
POSTED BY Paula Schaap at 10/19/2009 2:38:25 PM

The industry is absolutely rife with insider trading fraud. The only reason most of the execs are in the business is because of trading money, and they now nothing about the actual technology they're supposed to represent. Eventually, this is another market that has yet to crash. Very very dirty business, front to back, left to right, inside out, everywhere, all the time.
POSTED BY Mike at 10/21/2009 12:06:18 PM
Add your Comments:
 Name: Required
 Email: Required(will not be published)
All comments will be reviewed for appropriateness, length and lucidity.
 
 

Disclaimer: An affiliated broker-dealer of HedgeFund.net is compensated for providing capital introduction services to hedge funds and hedge fund managers, which may include one or more hedge funds mentioned in this article. Hedge funds and/or hedge fund managers mentioned in this article also may compensate HedgeFund.net for services provided to them by HedgeFund.net













 HOME    HEDGEPLUS    HEDGENEWS    PORTFOLIOS    FUNDS    PERTRAC              Copyright 2010, Channel Capital Group Inc. All Rights Reserved.   
NEITHER CHANNEL CAPITAL GROUP INC.("CCG"),ITS AFFILIATES,OR CCG'S OR ITS AFFILIATES RESPECTIVE OFFICERS,DIRECTORS,AGENTS,MEMBERS,SHAREHOLDERS AND EMPLOYEES (EACH A "CCG PARTY" AND COLLECTIVELY THE "CCG PARTIES")RECOMMENDS OR SOLICITS ANY INVESTMENT BY USERS OF THIS WEB SITE,THE MATERIAL CONTAINED HEREIN IS BASED UPON INFORMATION PROVIDED BY HEDGE FUND MANAGERS AND OTHER SOURCES. THE CCG PARTIES HAVE NOT INDEPENDENTLY VERIFIED SUCH INFORMATION,DO NOT REPRESENT IT AS ACCURATE ,TRUE OR COMPLETE, MAKE NO WARRENTY, EXPRESS OR IMPLIED REGARDING IT AND SHALL NOT BE LIABLE FOR ANY LOSSED,DAMAGES,COSTS, OR EXPENSES RELATING TO ITS ADEQUANCY ,ACCURACY ,TRUTH ,COMPLETENESS, OR USE, REGISTERED USERS SHOULD NOT RELY UPON DATA TO MAKE AN INVESTMENT DECISION ,AND SHOULD NOT THAT PAST PERFORMANCE IS NOT AN INDICATION OF FUTURE.