Only two things are infinite, the universe and human stupidity, and I'm not sure about the first - Einstein
INTEL CAPITAL AND IBM executives are facing insider trading charges after allegedly providing information that reaped a massive $25 million in illicit gains, the US Securities and Exchange Commission (SEC) said yesterday.
The SEC revealed that Rajiv Goel, a managing director of Intel subsidiary, Intel Capital, and IBM senior vice president Robert Moffat are among six senior execs arrested in what it is calling a “massive insider trading scheme”.
Goel is accused of having provided inside information about certain Intel quarterly earnings and a pending joint venture concerning Clearwire in which Intel had invested, netting him $250,000.
Moffat, meanwhile, is said to have provided information about Sun Microsystems which he obtained when IBM was considering buying Sun. That information made around $1 million in profits, said the SEC.
The case seems to revolve around Raj Rajaratnam, a portfolio manager with hedge fund Galleon Group.
“What we have uncovered in the trading activities of Raj Rajaratnam is that the secret of his success is not genius trading strategies. He is not the astute study of company fundamentals or marketplace trends that he is widely thought to be,” said Robert Khuzami, director of the SEC’s enforcement division.
“He cultivated a network of high-ranking corporate executives and insiders, and then tapped into this ring to obtain confidential details about quarterly earnings and takeover activity.”
The SEC has filed a complaint in the U.S. District Court for the Southern District of New York, and says its investigation is ongoing. µ
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