Report: Former AMD CEO Ruiz Was Source in Scandal
Former Advanced Micro Devices CEO Hector Ruiz allegedly shared confidential information with a Wall Street trader connected to an insider-trading scandal, according to a news report on Tuesday.
Tue, October 27, 2009
IDG News Service — Former Advanced Micro Devices CEO Hector Ruiz allegedly shared confidential information with a Wall Street trader connected to an insider-trading scandal, according to a news report on Tuesday.
A criminal case filed by the U.S. Securities and Exchange Commission on Oct. 16 alleged that an AMD executive shared confidential information about the company's reorganization in 2008 with a Wall Street executive, Danielle Chiesi. The AMD executive wasn't named in the court filing, but the Wall Street Journal said in a news report on Tuesday that it was Ruiz, citing unnamed sources. Chiesi works for the hedge fund New Castle Funds.
The SEC last week charged six individuals, including Wall Street and technology company executives, with involvement in an insider-trading scandal scheme that the agency said netted millions of U.S. dollars in illicit profits. The SEC filed a complaint in the U.S. District Court for the Southern District of New York.
Ruiz was AMD's CEO until July of last year, after which he was replaced by Dirk Meyer. However, he continued as the company's chairman until he stepped down in March. Ruiz is now the chairman of GlobalFoundries, AMD's manufacturing spinoff. AMD earlier this year spun off manufacturing assets to form GlobalFoundries in a joint venture with Advanced Technology Investment Company, which is owned by the Abu Dhabi government.
Ruiz is the latest in a list of technology executives who have allegedly shared information with the traders in the case. The executives charged included Robert Moffat, senior vice president and executive in IBM's systems and technology group, and Rajiv Goel, who is Intel treasury's managing director of investments. Intel and IBM have placed those executives on leave.
Other individuals charged by the SEC include Raj Rajaratnam, a portfolio manager with hedge fund Galleon Group; Anil Kumar, a director at McKinsey; and Mark Kurland of New Castle Funds.
McKinsey's Kumar was also charged with sharing information about AMD's reorganization in the case. Kumar allegedly tipped off Rajaratnam about pending transactions involving AMD and two Abu Dhabi-based "sovereign entities," the SEC said. Rajaratnam then made trades on Galleon's behalf based on the insider information.
AMD has had multiple transactions involving the Abu Dhabi government in recent years. In 2007, the Abu Dhabi government's Mubadala Development Company paid US$622 million to acquire an 8.1 percent stake in AMD.
GlobalFoundries declined to comment on the report, saying the allegations predated the launch of the company. AMD did not immediately respond to requests for comment.