An Indian is among seven persons charged by US authorities of running a “criminal club” which made USD 62 million in illegal profits by trading in the shares of computer company Dell.
Sandeep Goyal, a research analyst at the Manhattan office of a global asset management firm, has pleaded guilty to his role in the insider trading scheme and is cooperating with the government’s investigation.
Along with Goyal, hedge fund research analysts Jesse Tortora and Spyridon Adondakis have also pleaded guilty to the charges, US Attorney for the Southern District of New York Preet Bharara said here.
The FBI has also charged former portfolio manager at a Connecticut-based hedge fund Todd Newman, former portfolio manager and co-founder of a Manhattan-based hedge fund Anthony Chiasson, research analyst Jon Horvath and fund manager at an investment firm Danny Kuo.
US regulator Securities and Exchange Commission (SEC) also brought out its own insider trading charges against the seven.
Bharara, who has led the government’s relentless crackdown on insider trading on Wall Street, said the charges unsealed “allege a corrupt circle of friends who formed a criminal club whose purpose was profit and whose members regularly bartered lucrative inside information so their respective funds could illegally profit.”
He said the seven made profits to the tune of more than USD 61 million on illegal trades of the Dell stocks. “We have demonstrated through our prosecutions that insider trading is rampant and has its own social network, a network we intend to dismantle. We will be unrelenting in our pursuit of those who think they are above the law.”
The government’s insider trading crackdown has netted Wall Street big wigs like Galleon hedge fund founder Raj Rajaratnam and former Goldman Sachs director Rajat Gupta. While Rajaratnam is serving an 11 year prison sentence, Gupta will go on trial on insider trading charges in April.
Newman, Horvath and Kuo were arrested by the FBI while Chiasson surrendered to federal authorities. Newman 47, of Massachusetts, Chiasson 38, of New York, Horvath 42, of New York, and Kuo 36, of California, are each charged with one count of conspiracy to commit securities fraud and one count of securities fraud.
They face up to 20 years in prison and a maximum fine of five million dollars. Tortora, 34, Adondakis, 40, and Goyal, 39, each pleaded guilty to one count of conspiracy to commit securities fraud and one count of securities fraud. They each face a statutory maximum sentence of 25 years in prison.