By Grant McCool
Oct 26 (Reuters) - A former chief financial officer at
Xilinx Inc on Friday became the latest executive to
settle civil charges of being part of now-imprisoned hedge fund
tycoon Raj Rajaratnam's insider trading network.
The technology executive, Kris Chellam of Saratoga,
California, was charged by the U.S. Securities and Exchange
Commission of giving Rajaratnam confidential information on
Xilinx in December 2006.
The tip helped the Galleon Group founder, who was Chellam's
close friend, make nearly $1 million in illicit profits, the SEC
said in its lawsuit.
Chellam has not been criminally charged. He agreed to pay
$1.75 million to settle the case, the SEC said. The agreement is
subject to approval by U.S. District Judge Barbara Jones in New
Chellam's lawyer, Christopher Steskal of Fenwick & West in
San Francisco, could not immediately be reached for comment.
Xilinx, a maker of programmable chips, is not accused of
Rajaratnam, 55, was convicted of criminal charges in May
2011. He is serving an 11-year prison term, one of the longest
imposed for insider trading. He was also ordered to pay a fine
of $92.8 million to the SEC.
In a broad crackdown on insider trading, the SEC and the
U.S. Department of Justice have won scores of settlements,
guilty pleas or trial convictions over the past four years.
Chellam was mentioned at Rajaratnam's trial as being part of
a network of friends and business associates who tipped
Rajaratnam and Galleon with corporate secrets.
The SEC had accused Chellam of tipping Rajaratnam with
confidential details from internal company reports indicating
that Xilinx would fall short of revenue projections. The tip
enabled Rajaratnam to sell short Xilinx stock, making $978,684
after the negative information was announced on Dec. 7, 2006.
At the time, Chellam had his own investment in Galleon
funds and was a prospective employee at Galleon, the SEC said.
It said Rajaratnam hired Chellam at Galleon in May 2007.
On Thursday, a federal appeals court in New York heard
arguments in Rajaratnam's challenge of his conviction.
Rajaratnam contends investigators improperly obtained permission
from a judge in March 2008 to tap his cell phone. The court did
not issue an immediate ruling.
The case is SEC v Kris Chellam in U.S. District Court for
the Southern District of New York, No. 12-7983.