Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Thursday, June 20, 2024 | Back issues
Courthouse News Service Courthouse News Service

Another Guilty Plea in Huge Inside Trading Case

(CN) - Danielle Chiesi pleaded guilty Wednesday in what prosecutors call the largest hedge fund insider trading case in history. Chiesi, a consultant for the hedge fund New Castle Funds, traded on tips from a former IBM executive.

Chiesi made at least $1.7 million by trading on secrets that former IBM executive Robert Moffat admitted he leaked to her. Moffat was sentenced in September to 6 months in prison.

Chiesi pleaded guilty in Manhattan Federal Court.

"By sharing and conspiring to trade on inside information, Chiesi compromised the companies she sold out and distorted the market for their stocks," U.S. Attorney Preet Bharara said in a statement. "Today's plea should send yet another strong message that we have zero tolerance for privileged professionals who game the system and who think the rules apply only to everyone else."

This case is the first investigation in which federal agents admitted using wiretaps to investigate Wall Street inside trading.

Transcripts show that Chiesi had expressed concern to her co-conspirators about being caught in the scheme.

"You put me in jail if you talk," she said in one conversation. "I'm dead if this leaks. I really am ... and my career is over. I'll be like Martha fucking Stewart."

Charges are still pending against Sri Lankan billionaire Raj Rajaratnam, the alleged kingpin.

Chiesi is scheduled for sentencing on May 13. Assistant U.S. Attorneys Jonathan Streeter and Reed Brodsky and Special Assistant U.S. Attorney Andrew Michaelson are in charge of the prosecution.

Categories / Uncategorized

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Loading...