New York (HedgeCo.net) – The Galleon hedge fund insider trading case yesterday saw its eighth guilty plea in Mark Kurland, a onetime colleague of Danielle Chiesi at New Castle Funds LLC, Reuters reports.
The SEC alleges that Kurland, Chiesi and a former executive at IBM, Robert Moffat, engaged in overlapping insider trading schemes, according to Reuters. Moffat’s case has not been resolved, but his lawyer is talking with prosecutors, the newspaper said.
Because of legal hurdles in obtaining the 14,000 wiretap intercepts, the SEC is seeking it from Rajaratnam and his co-defendant, Chiesi.
Rajaratnam’s lawyer attacked the U.S. government’s wiretap evidence saying he would file a motion to suppress the telephone recordings which were used to arrest Rajaratnam and more than a dozen other people in the Galleon raid. A hedge fund manager known as “Tipper X”, and hedge fund consultant Roomy Khan are cooperating with investigators in providing evidence against Rajaratnam.
Federal prosecutors have doubled the sum of the allegations and former senior partner at McKinsey & Co., Anil Kumar, pleaded guilty to conspiracy, insider trading and securities fraud.
Rajaratnam was taken into custody in New York on Oct. 16, 2009 in what is being called the USA’s largest hedge fund insider-trading scheme.
The insider trading case involves the employees of some of America’s best-known companies, including International Business Machines Corp, McKinsey & Co and Intel Capital, an arm of Intel Corp, and Chiesi, an executive at New Castle Funds LLC was also indicted on multiple counts of conspiracy and securities fraud.
A civil lawsuit is scheduled for August 2, 2010. The prosecution has also indicted Rajaratnam on criminal charges.
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