Morgan Stanley Managing Director Kamal Ahmed is “cooperating” with the bank’s investigation of allegations raised in a US court filing that an employee helped pass information in the Galleon Group hedge fund insider trading scandal, Ahmed’s lawyer said.
Douglas Tween, a lawyer at Baker & McKenzie in New York who represents Ahmed, said today in a phone interview that he is “confident that when the investigation is completed, and all the facts are gathered, it will be shown that he did nothing illegal or unethical”.
Raj Rajaratnam, the founder of Galleon Group, is charged with five counts of conspiracy to commit securities fraud and nine counts of securities fraud. He’s the central figure in an insider-trading probe in which more than 20 people have been criminally charged. Rajaratnam has pleaded not guilty and is scheduled to go to trial on February 28.
Prosecutors filed a superseding indictment dated January 20 against Rajaratnam that added a new securities-fraud count and provided additional details about stocks he is alleged to have traded illegally. A Morgan Stanley banker, whose name was redacted in the court filing, was accused of passing information on Advanced Micro Devices (AMD) Inc’s purchase of ATI Technologies Inc.
“In or about May 2006, [redacted], a banker with Morgan Stanley, provided [redacted] with information regarding AMD’s acquisition of ATI,” according to the letter, signed by Assistant US Attorney Jonathan Streeter. “[Redacted] provided this information to Rajaratnam.”
Bloomberg data shows that Morgan Stanley acted as an advisor to AMD on the ATI acquisition. The bank also provided a $2.5 billion loan to finance the deal.
