Intel Corp (INTC)

[RobertG]

Atheros exec, others charged in trading case

Mark LaPedus
(11/05/2009 5:24 PM EST)
URL: http://www.eetimes.com/showArticle.jhtml?articleID=221600528

SAN JOSE, Calif. -- Federal authorities have charged 14 individuals arising out of their ongoing investigation of insider trading at hedge funds and stock trading firms. The case has implicated individuals from AMD, IBM, Intel, GlobalFoundries, and now, Atheros.
On Oct. 16, six individuals were arrested for their alleged involvement in the largest hedge fund insider trading case in history. Federal authorities arrested Raj Rajaratnam, who ran the Galleon group. Also reportedly implicated were Robert Moffat, a senior vice president of IBM Corp., and Rajiv Goel, Intel Corp. managing director. Moffat resigned from IBM this week, according to reports.

The defendants collectively are charged with allegedly participating in insider trading schemes that generated more than $20 million in illegal profits.

Hector Ruiz resigned as chairman of Globalfoundries Inc. earlier this week after being reportedly linked to the high-profile insider-trading case. Ruiz, formerly chairman and CEO of Advanced Micro Devices Inc., allegedly supplied confidential information about AMD's plans to spin off its manufacturing operations to a defendant in the Galleon Group insider-trading case.

The following eight defendants were arrested earlier on Thursday (Nov. 5): Zvi Goffer, who formerly worked at The Schottenfeld Group LLC; Arthur Cutillo, an attorney at the law firm of Ropes & Gray LLP; Jason Goldfarb, an attorney in New York; Craig Drimal, who worked in the offices of the Galleon Group, but is not employed by Galleon; Emanuel Goffer, who formerly worked at Spectrum Trading LLC, and currently is associated with Incremental; Michael Kimelman, currently associated with Incremental; David Plate, formerly employed by Schottenfeld, and currently associated with Incremental; and Ali Hariri, a vice president of Atheros Communications.

A ninth charged defendant, Deep Shah, who was formerly employed by Moody's Investors Service Inc. remains at large.

''Between 2008 and March 2009, Hariri provided inside information to a cooperating witness who managed a hedge fund in California in exchange for advice received from that cooperating witness about the purchase and sale of other securities. The cooperating witness caused the hedge fund to execute securities transactions in Atheros stock based on the Inside Information, realizing hundreds of thousands of dollars of profits,'' according to federal authorities.

The five defendants who were previously charged and have pleaded guilty in Manhattan federal court to insider trading crimes are: Steven Fortuna, formerly a Managing Director of S2 Capital LLC; Ali Far, founder of Spherix Capital LLC; Richard Choo-Beng Lee, former President of Spherix; Roomy Khan, a California trader; and Gautham Shankar, a proprietary trader at Schottenfeld in New York.

The criminal investigation, which is led by the U.S. Attorney's Office for the Southern District of New York and the FBI, working in close coordination with the U.S. Securities and Exchange Commission (SEC).