Ex AMD CEO named in insider trading scandal
Hector Ruiz, AMD's former CEO and currently chairman of AMD spinoff Globalfoundries, has been named in the Galleon insider trading scandal that has so far seen six top executives arrested.
AMD shares dropped in after hours trading after the Wall Street Journal stated that Ruiz had passed on confidential information regarding the Globalfoundries spinoff to Raj Rajaratnam, boss of hedge fund Galleon when he was still AMD's CEO. Rajaratnam, co-founder of Galleon, and five others are currently facing federal criminal and civil charges.
The men are accused of using inside knowledge to help investors make an illegal $25 million profit on deals made between 2006 and 2009 involving companies such as AMD, Google and Sun in return for monetary reward. Wire taps were put on the suspects after an anonymous tip-off.
The probe into Galleon could be the biggest insider-trading case in years, as Rajaratnam, along with the other arrested men, also stand accused of trading on their insider knowledge involving companies like Intel, IBM and Google.
If the SEC finds that AMD's internal procedures preventing insider trading are at fault, legal action against the company could be taken, say Wall Street insiders.
Globalfoundries and AMD have so far refused to comment further on the allegations.