Insider trader and former hedge fund worker Danielle Chiesi has agreed to pay $540,000 to settle SEC civil charges against her, in connection to the Galleon insider trading case, CNBC reports.Chiesi previously pleaded guilty to securities fraud and conspiracy to commit securities fraud, and will be sentenced for the criminal charges against her on July 27.
Chiesi is appealing for a lenient sentence from the judge overseeing her case, as she claims she was bullied into sharing material, non-public information by her hedge fund boss and longtime lover, Mark Kurland.
During the Raj Rajaratnam trial, jurors heard a series of wiretapped conversations between Chiesi, th e former Galleon chief and Kieran Taylor, in which they discuss trading Akamai Technologies stock back in 2008.
In one of those calls, Chiesi told Raj that Akamai is going to lower its earnings guidance, a few days before the company revealed the details publicly in July of that year. Prosecutors say Chiesi was tipped by Taylor, who at the time, worked for the tech company.
The government says that after he received the tip, Raj increased his short position on the stock from 300,000 shares to 875,000 shares, just before the public announcement on July 30.
“They’re gonna guide down. I just got a call from my guy,” Chiesi said to Raj. “I played him like a finely tuned piano.” Then she urged Raj to act before Wednesday, when Akamai would go public with the downgrade.
After the announcement on Wednesday, at precisely 5:30 pm, Raj called Chiesi. “I just wanted to say thank you,” he said. The news of the reduced projections had sent the stock tumbling by more than 25%, Akamai’s CFO testified yesterday.