Updated on October 23 at 3:00 p.m. PDT: with additional information identifying the person who is talking to the "AMD executive" and additional statements.
An unnamed executive at Advanced Micro Devices is cited repeatedly in the Galleon Funds insider-trading case, presenting a potentially awkward situation for the chipmaker as the case goes forward.
It's not clear if the AMD executive cited in the U.S. Attorney's complaint would be charged or even implicated by name, but government charges of insider trading have rattled Silicon Valley. Rajiv Goel, a managing director of strategic investments for Intel's treasury group, was arrested and charged in the case and put on leave, forcing Intel CEO Paul Otellini to publicly address the case.
And a high-level executive at IBM, senior vice president Robert Moffat, was placed on leave Monday after he was charged. Moffat is accused of supplying details about IBM and Sun Microsystems earnings to Danielle Chiesi, who worked for the New Castle hedge fund.
"If it's the top two (executives at AMD), that would be significant. But it could be anyone. Mid-level executives. We don't know," said David Wu, an analyst at GC Research.
"We are currently reviewing the situation and we have no further comment," AMD spokesman Michael Silverman said.
The case revolves around Raj Rajaratnam, who founded the Galleon Group, a New York-based hedge fund that manages $7 billion in funds. Federal prosecutors charged Rajaratnam and five others on Friday with securities fraud, alleging they were involved in insider trading of well-known tech companies, including Intel, Google, AMD, and IBM.
In the wake of the allegations, the Galleon Group said it will close, though the firm is exploring alternatives for its business that could allow parts of the hedge fund to survive, according to the Wall Street Journal.
AMD was prominent in the complaint, filed by the U.S. Attorney ... Read more
Updated on October 21 at 7:25 p.m. PDT: correcting, at bottom, for what the U.S. Attorney's office describes as "CC-1."
Think of it as a twist on the old rivalry between chip giants Intel and Advanced Micro Devices. But this time, the rivalry is about which company can make a hedge fund more money.
The complaint filed by the government against six people on Friday details how a relatively obscure Intel treasury executive and a prominent hedge fund manager allegedly participated in an insider-trading ring centered on an Intel investment. The document also shows alleged insider trading of AMD shares by an adviser from McKinsey & Company before the chipmaker spun off of its manufacturing operations.
The case revolves around Raj Rajaratnam, who founded the Galleon Group, a New York-based hedge fund that manages $7 billion in funds. Federal prosecutors charged Rajaratnam and five others on Friday with securities fraud, alleging they were involved in insider trading of some of the most well-known tech companies including Intel, Google, AMD, and IBM.
Jim Walden, a lawyer for Rajaratnam, said Friday, "My client is innocent and we are going to fight the charges," according to The New York Times.
Rajaratnam, a native of Sri Lanka, got his start as a semiconductor analyst at investment-banking firm Needham & Co. and parlayed this into the Galleon Group, where he had a reputation for particularly aggressive information-gathering tactics.
And one of his contacts was Rajiv Goel, a managing director of strategic investments for Intel's treasury group and one of the six defendants.
Goel is not well known inside--or outside--of Intel. In fact, he is an Intel executive apparently so obscure that CEO Paul Otellini said in a television interview Monday that he'd never even heard of him--yet somebody who has dragged the chipmaker into the biggest insider-trading scandal to hit Silicon Valley in years. When asked about the case in an interview with Fox Business News Monday, Otellini said his first reaction was, "'Who's Rajiv Goel'--I'd never heard of this guy," the CEO said, according to a Fox transcript. "He's a fairly low-level guy." Otellini added: "People are people. I don't want to judge him. He hasn't been arrested. I think he's only been charged. If this is true, he's out."
Goel was, in fact, arrested on Friday in San Jose, Calif. ... Read more
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