MORGAN Stanley banker Kamal Ahmed has been named in the US government’s investigation of Galleon Group hedge fund manager Raj Rajaratnam for insider trading.
Court charges filed by US prosecutors on Friday accuse a banker identified as Ahmed of leaking sensitive information about Advanced Micro Devices’ takeover of ATI Technologies in 2006. It is the first time a Wall Street banker has been implicated in the alleged insider dealing ring.
Ahmed allegedly told a third party about the deal, who told Rajaratnam, the filing said.
While a redacted letter released to the public blanked out the banker’s name, Morgan Stanley has placed Ahmed on leave and he is being represented by Baker & McKenzie lawyer Douglas Tween.
Sources told City A.M. yesterday that Morgan Stanley had conducted an internal investigation into the allegations but had found no evidence against Ahmed. “Nothing has come out of that,” one said.
Ahmed, who joined Morgan Stanley in 2000, has not been charged with any wrongdoing.
Morgan Stanley spokesman Pen Pendleton said Morgan Stanley was “fully co-operating with the government’s investigation.” “If proven to be true, the alleged conduct would be a violation of Morgan Stanley’s values and policies,” he said.
Sri Lankan-born Rajaratnam, founder of the Galleon Group, is to be tried next month on charges of conspiring to commit securities fraud in the biggest case of insider trading involving hedge funds in US history.
FAST FACTS | RAJ RAJARATNAM
Founded the Galleon Group in 1997.
Worth $1.3bn in 2009 according to Forbes.
Arrested in October 2009 by US Attorney for allegedly buying inside information on stocks.
Allegedly made $36m (£22.5m) from fraud.