Another high ranking executive in the computer industry has become entangled in the Galleon hedge fund scandal that is sending tremors through Wall Street. Former Advanced Micro Devices Inc (AMD), chairman and chief Hector Ruiz is alleged to have shared classified information about AMD business deals with Ms Chiesi, who worked at the hedge fund New Castle Partners, about a 2008 restructuring of AMD. The joint deal took off for AMD’s manufacturing sector bankrolled by sponsors from United Arab Emirates. Mr. Ruiz ended up becoming chairman of the new company, Global foundries Inc., and today still remains in that position.
So far, Global Foundries has declined to make a statement. Drew Prairie, an AMD spokesman, said, “We are thoroughly reviewing the situation, but at this time we don’t have any more detail to discuss publicly. We are not aware of any allegation of criminal misconduct on the part of any current or former AMD employees, nor have any current or former AMD employees been charged with a crime.”
Galleon and New Castle bought AMD shares in the hope of making a profit when the deal was struck, according to a criminal complaint filed by the Manhattan US attorney’s office and a civil action by the SEC. The companies eventually did not profit amid the recession last winter.
So far Mr Ruiz has not actually been named in the case and has declined comment. The involvement of the 63 year old Ruiz adds yet another big name to a case in which Raj Rajaratnam, the billionaire co-founder of the hedge fund galleon group has been ensnared. So far five other individuals face federal criminal and civil charges.
Mr. Ruiz is a much respected executive in the computing sector and is credited with innovative changes that helped AMD compete successfully against Intel Corp.
So far the US attorney’s office and SEX officials have not divulged much information about the role of Mr Ruiz, who appears not to have gained financially from this passage of information. What the officially authorized liabilities or potential charges against him will be made in the coming days. There are also several other unnamed executives also named in the case who did not trade information, nor did they benefit financially, who have been accused of insider trading, but all have denied wrong doing
The complaint against Mr. Rajaratnam also asserts he obtained insider information about some AMD deals from Anil Kumar, who was employed at McKinsey & Co., which provided financial advice to AMD. So far, Anil Kumar has denied the charges.
According to government sources, Mr. Moffat, an IBM senior manager, also shared insider information about AMD business deal with Ms. Chiesi. Like Anil Kumar, the attorney representing Mr Moffat says his client has not made any profit and hopes that all charges will be dropped.
While all parties involved with the Galleon hedge fund have denied wrong doing, wire taps and recorded conversations indicate otherwise. The facts will be revealed in due time when these high ranking people go to court.
As of today, Galleon has liquidated close to $3.7 billion in securities in its hedge funds’ portfolios.