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Silicon Valley executive charged with giving inside information to Galleon's Raj Rajaratnam

Monday, October 29, 2012

Bailey McCann, Opalesque New York: Former Silicon Valley executive Kris Chellam faces charges today from the Securities and Exchange Commission (SEC) that he provided inside information to convicted hedge fund manager Raj Rajaratnam allowing the Galleon hedge funds to make nearly $1m in illicit profits. The charges follow action in court yesterday by Mr. Rajaratnam that asked a federal judge to toss out much of the evidence presented by the government in the 2009 insider trading case and reverse his conviction.

According to the complaint, the SEC alleges that Chellam told Rajaratnam when Xilinx Inc. would fall short of revenue projections it had previously made publicly. The tip enabled Rajaratnam to engage in short selling of Xilinx stock. Chellam already had a large investment in Galleon Group, Rajaratnam's hedge fund which was one of the largest in the world managing near $7bn at the time of the insider trading probe in 2009. Chellam made gave Rajaratnam the tip in 2006, by 2007 he was working for Galleon.

In its case against Rajaratnam and Galleon Group the government relied heavily on the use of wire taps which were placed on Rajaratnam cell phone. In an appeal filed yesterday, Rajaratnam's lawyer said that the government acted improperly in recording over 2,000 phone co......................

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