SEC v. Galleon Management LP, et al. (Insider Trading)
The Securities and Exchange Commission charged Raj Rajaratnam and his hedge fund advisory firm, Galleon Management LP, with engaging in an insider trading scheme that generated more than $25 million in illicit gains. The SEC alleged that Rajaratnam obtained insider tips and confidential information from friends and business associates about corporate earnings or takeover activity at several companies, which he then used to illegally trade on behalf of Galleon. The SEC also charged six others, including IBM senior vice president Robert Moffat, who allegedly provided inside information about Sun Microsystems. All of the defendants were charged with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In March 2010, Moffat pleaded guilty to two criminal counts in the matter (see related IBM instance, “U.S. v. Moffat (Insider Trading)”). In February 2011, Moffat reached a settlement with the SEC, which permanently barred him from acting as an officer or director of a publicly traded company.
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U.S. v. Moffat (Insider Trading)