Executives from IBM and Intel have been arrested amid allegations they were involved in an insider trading scam.
According to a report from the Associated Press, six people were arrested today as part of an insider trading case, including Bob Moffat, senior vice president and general manager of IBM's Systems and Technology Group; Rajiv Goel, director of strategic investments at Intel Capital; Anil Kumar, a director at management consultancy McKinsey & Co; and Raj Rajaratnam, the founder of the $7bn Galleon Group hedge fund.
The AP reports that these executives (as well as two others who were not named) had passed insider information concerning Google, Polycom, and Hilton Hotels to Rajaratnam, who then executed trades that helped Galleon Technology Funds to get more than $20m in profits between January and July 2007. A report from Reuters says that trades took place at Intel Capital as well and that insider information was used in the trading of stocks for IBM, Sun Microsystems, and Advanced Micro Devices.
The heir apparent to IBM CEO Sam Palmisano has been arrested and charged with insider trading, as US authorities cracked down on an alleged $20m scheme involving shares in some of the IT industry.s biggest names.
The case . which the FBI calls the largest hedge-fund insider trading case in US history . has also seen the arrest of an employee at Intel, the world.s largest chip maker.
Today, the Federal Bureau of Investigation and the US Attorney.s office in Manhattan filed insider trading charges against six people, including Robert Moffat, senior vice president and general manager of IBM.s Systems and Technology Group, and Rajiv Goel, director of strategic investments in Intel.s treasury department. Moffat had climbed the IBM ladder to the point where he was a prime candidate to succeed Palmisano as CEO.