Another Top Business Executive is Charged in Connection with the Galleon Insider Trading Scheme
The Securities and Exchange Commission (“SEC”) announced charges against a top silicon valley executive alleging that he gave material inside information to Raj Rajaratnum, purportedly allowing the Galleon hedge funds to reap illegal profits of $1 million. Insider trading generally involves the use of confidential non-public material information about a publicly traded company to unfairly buy or sell the security at a profit. In other words, an insider trader knows something very important about the company that the investing public does not know, and uses that information to his or her advantage.
Specifically, the SEC claims that Kris Chellam gave a tip to Mr. Rajaratnum in December of 2006 by providing confidential details from non-public company reports indicating that Xilinx Inc., would report revenue that was less than it had previously publicly predicted. Apparently, Mr. Chellam was a close friend of Mr. Rajaratnum and invested in the Galleon funds. In fact, Galleon subsequently hired Mr. Chellam in 2007.
According to the SEC Mr. Chellam has agreed to pay $1.75 million to settle the SEC’s charges. The settlement requires court approval.
Posted by Vincent D. Slavens who can be reached at email@example.com