New Castle trader Chiesi pleads guilty

A FORMER hedge fund trader pleaded guilty to passing inside information to Galleon Group founder and co-defendant Raj Rajaratnam in a New York court yesterday.

Danielle Chiesi had been due to stand trial alongside Rajaratnam, who denies any wrongdoing.

The former trader at New Castle Funds, which was once part of Bear Sterns, was accused of making around $4m (£2.5m) in illegal profits from trades on confidential company information during 2008.

She learnt secret data about technology firms Intel, IBM and AMD, prosecutors said.

Chiesi allegedly used tip-offs from former IBM executive Robert Moffat, which she then passed to Rajaratnam.

Moffat pleaded guilty and was sentenced to six months in prison and a $50,000 (£32,410) fine last September.

Of the 24 people criminally charged in the Galleon insider trading case, 16 have now pleaded guilty.

The federal court in New York is due to sentence Chiesi on 13 May. She is set to receive between 37 and 46 months in prison as part of a plea bargain, but her lawyer said she is not expected to testify against Rajaratnam.