The Honorable Jed S Rakoff, United States District Judge, United States District Court for the Southern District of New York, has entered a Final Judgment as to Danielle Chiesi on July 12, 2011, in the SEC’s insider trading case, SEC v Galleon Management, LP, et al., 09-CV-8811 (SDNY) (JSR). The SEC filed its action on October 16, 2009, against Raj Rajaratnam, Galleon Management, LP, Danielle Chiesi and others, alleging a widespread insider trading scheme involving hedge funds, industry professionals, and corporate insiders.
At the time of the alleged conduct, Chiesi was a consultant and portfolio manager at New Castle Funds LLC, formerly a registered hedge fund investment adviser. The SEC alleged that Chiesi traded on and tipped others to material, nonpublic information she learned from corporate insiders about Akamai Technologies, Inc., Sun Microsystems, Inc., IBM, and Advanced Micro Devices Inc.
The Final Judgment entered against Chiesi: (1) permanently enjoins her from violations of Section 10(b) of the Exchange Act of 1934 (“Exchange Act”) and Exchange Act Rule 10b-5, and Section 17(a) of the Securities Act of 1933 (“Securities Act”); and (2) orders her liable for disgorgement of ill-gotten gains of USD500,000, together with prejudgment interest of USD40,534.90, for a total of USD540,534.90. Chiesi awaits sentencing in a parallel criminal action against her in which she pleaded guilty, United States v. Chiesi, 10 CR 1184 (RJH) (SDNY).
