An SEC lawyer told a federal court yesterday that more people could be charged in the insider trading scandal that has so far brought down senior IBM executive Robert Moffat and former AMD CEO Hector Ruiz and as good as her word 14 more were charged Thursday morning with conspiracy to defraud, engaging in fraudulent activities and making untrue statements.
Those arrested include an analyst for Moody’s and an M&A attorney with Ropes & Gray, the law firm that advised 3Com and Avaya when they were acquired by private equity houses. Those stocks have now been added to the expanding list of tech stocks that were allegedly traded based on insider information. That list now includes AMD, Sun, Intel, IBM, Google, Akamai, Atheros and Kronos.
Zvi Goffer, one of the former Galleon employees picked up on Thursday reportedly supplied tipsters with pre-paid cell phones to avoid detection by investigators and paid them in cash. Galleon CEO Raj Rajaratnam is supposed to be the kingpin behind mischief.
Besides Moffat, an executive at Intel and another at McKinsey were among the six people previously charged. The government claims the latest round of charges represents illegal gains of $20 million on top of the $20 million allegedly in the first set of indictments.
Out of the 20 people charged so far, five have pleaded guilty.