Ex-Deloitte partner Flanagan pleads guilty to federal insider trading charges

Thomas Flanagan, a former vice chairman in the Chicago office of Deloitte LLP whose client list once included Warren Buffett, has pleaded guilty in federal court to insider trading charges tied to improper trades in stocks of large Chicago-based corporate clients whose audits he oversaw.

Mr. Flanagan, 64, of Chicago, pleaded guilty to one charge of securities fraud and admitted garnering profits totaling about $420,000 from trading in stocks of Deloitte clients including Deerfield-based Walgreen Co., Hoffman Estates-based Sears Holding Corp. and (at the time) Schaumburg-based Motorola Corp., according to the U.S. attorney's office in Chicago.

In 2010, Mr. Flanagan paid more than $1 million to settle a civil lawsuit brought by the Securities and Exchange Commission.

Mr. Flanagan, who worked for Deloitte for more than three decades and was a pillar of Chicago's business scene, was lead partner on Deloitte's engagements with Walgreen, Sears and Minneapolis-based Best Buy Co. Inc., according to the plea agreement. He also served on Deloitte's non-audit team for Motorola.

According to the plea agreement, Mr. Flanagan traded on advance knowledge of a weak fourth-quarter 2007 earnings result for Walgreen, as well as Walgreen's deal that year to buy Option Care Inc. He also traded on advance knowledge of weaker-than-expected sales for Motorola in the fourth quarter of 2007 and Sears' first-quarter 2008 earnings, which were worse than analysts predicted, according to the plea agreement.

Mr. Flanagan also tipped a relative, who traded on the information, obtaining at least $58,000 in profits, prosecutors said. That relative isn't being charged. The SEC previously identified that relative as Mr. Flanagan's son, Patrick.

Sentencing before U.S. District Judge Robert M. Dow Jr. is scheduled for Oct. 25. Conviction on securities fraud charges can mean up to 20 years in prison and up to $5 million in fines. The plea agreement between Mr. Flanagan and the government anticipates sentencing guidelines between 37 and 46 months in prison, and federal prosecutors will recommend a sentence at the low end of that range.

Rajat Gupta guilty of insider trading

(Reuters) — Former Goldman Sachs Group Inc board member Rajat Gupta was convicted on Friday of illegally tipping his hedge-fund manager friend Raj Rajaratnam with secrets about the investment bank, a major victory for prosecutors seeking to root out insider trading on Wall Street.

A Manhattan federal court jury found Gupta guilty of three counts of securities fraud and one count of conspiracy, ending the four-week trial. He was found not guilty on two other securities fraud charges.

The jury delivered the verdict on the second day of its deliberations. U.S. District Judge Jed Rakoff has set sentencing for Oct. 18.

The verdict marks a stunning fall for Gupta, who is also a former top executive at business consulting firm McKinsey & Co and a former director of Procter & Gamble.

Gupta's one-time associate Rajaratnam, who was convicted of 14 counts of insider trading at a trial last year, is now serving an 11-year prison term.

Since being implicated in the Rajaratnam case more than a year ago, Gupta has denied the charges and vowed to put on a vigorous defense. At trial, his lawyers argued that prosecutors "had no real, hard, direct evidence" against Gupta, who did not take the witness stand.

The U.S. government crackdown on insider trading has led to guilty verdicts or plea bargains of scores of executives, lawyers and financial consultants.

The case is USA v Gupta, U.S. District Court for the Southern District of New York, No. 11-907.

Former McKinsey chief Rajat Gupta indicted in insider case

The former head of McKinsey & Co.'s Chicago office surrendered Wednesday to face a six-count securities fraud indictment that makes him the latest defendant in the biggest insider trading case in history.

The charges against Rajat Gupta were unsealed in U.S. District Court in Manhattan, where the indictment accused him of cheating the markets with Raj Rajaratnam, the convicted hedge fund founder who was the probe's prime target.

Gupta, 62, of Westport, Conn., a former board member of Goldman Sachs and Procter & Gamble, was awaiting an arraignment on one count of conspiracy to commit securities fraud and five counts of securities fraud.

He lead McKinsey's Chicago office from 1989 to 1994, and also once served on the University of Chicago's board of trustees.

The charges carry a potential penalty of 105 years in prison.

The Securities and Exchange Commissioner originally brought civil fraud charges against Gupta in March. The SEC alleged that, at the height of the financial crisis, he passed along privileged financial information that helped enrich Rajaratnam, a former billionaire hedge fund manager who was the prime target of the criminal probe.

Gupta's lawyer responded by accusing the SEC of launching a "flawed case premised in large part on unreliable evidence being used in an attempt to bring down a man of sterling reputation and remarkable achievements without the procedural safeguards historically accorded to all persons similarly charged."

In a release, U.S. Attorney Preet Bharara said Gupta broke the trust of some of the nation's top public companies and "became the illegal eyes and ears in the boardroom for his friend and business associate, Raj Rajaratnam, who reaped enormous profits from Mr. Gupta's breach of duty."

Alluding to the wide scope of the prosecution, he added: "Today we allege that the corruption we have seen in the trading cubicles, investment firms, law firms, expert consulting firms, medical labs, and corporate suites also insinuated itself into the boardrooms of elite companies."

FBI Assistant Director-in-Charge Janice Fedarcyk said the arrest was the latest to occur in an initiative launched by the FBI in 2007 against hedge fund cheats.

"The conduct alleged is not an inadvertent slip of the tongue by Mr. Gupta," she said. "His eagerness to pass along inside information to Rajaratnam is nowhere more starkly evident than in the two instances where a total of 39 seconds elapsed between his learning of crucial Goldman Sachs information and lavishing it on his good friend."

The indictment said Gupta shared confidential information about both Goldman Sachs and Procter & Gamble from 2008 through January 2009, knowing that Rajaratnam would use the secrets to buy and sell stock ahead of public announcements.

The Securities and Exchange Commission also brought civil insider trading charges against Gupta Wednesday.

The SEC said Gupta, the former McKinsey & Co. global head, illegally tipped Rajaratnam, who has been sentenced to 11 years in prison after he was convicted at trial.

Rajat Gupta: Bigger Than Madoff?

Rajat Gupta may be the most important businessman ever charged with a serious violation of securities laws. The only people who even comes close to the stature of Gupta are Michael Milken and Bernard Madoff. But despite the vast wealth people had given to Madoff to manage, he was never a member of the inner circle of corporate power in America.

Gupta is one of the most connected people in corporate America that you've never heard of, as Duff McDonald showed in his October 2010 Fortune magazine profile. Gupta spent 34 years at McKinsey, arguably the most important corporate consulting company in the world. In 1994, he was elected head of McKinsey, a position he held for nine years.

Under his tenure, McKinsey grew into a truly global powerhouse, opening at least 20 offices overseas and more than doubling the number of consultants employed, McDonald writes.

Raj Rajaratnam of Galleon Group gets 11 years for insider trading

Raj Rajaratnam, the founder of the Galleon Group family of hedge funds, was sentenced on Thursday to 11 years in prison for his role in a huge insider trading case.

That is the longest sentence ever handed out for insider trading. Previously, the record was ten years—held by another Galleon employee, Zvi Goffer, and Hafiz Muhammad Zubair Naseem, a former Credit Suisse banker sentenced in 2008.

Prosecutors had sought a sentence of up to more than 20 years in prison, while Rajaratnam's lawyers had asked for no more than 8 years.

Rajaratnam was convicted in May on several charges of insider trading and conspiracy.

Rajaratnam, who headed Galleon Management, was convicted in May on 14 counts of conspiracy and securities fraud for illegally using inside information to trade in stocks such as Goldman Sachs and Intel. The trading generated profits or avoided losses of $72 million, the government estimated.

The sentence was substantially less than the government sought. In an August court filing, the Justice Department proposed a prison sentence of 19 years and seven months to 24 years and five months. Such a term was warranted to “provide just and fair punishment for perhaps the worst insider trading offender (who has been caught to date) in history, and deter others,” the Justice Department wrote.

To build its case against Rajaratnam, the government used tactics traditionally associated with investigations of violent offenses, such as drug dealing and organized crime. Though Rajaratnam did not testify at his trial, the prosecution made extensive use of secretly made recordings of him talking to his associates.

According to the government, Rajaratnam gathered inside information about pending corporate deals and earnings announcements from an array of tipsters including a Goldman Sachs board member, a senior partner at the consulting firm McKinsey & Co., and an employee at another hedge fund.

Rajaratnam, who is in his 50s, will join a list of high-profile, white-collar financial figures sent to prison, including former Enron executive Jeffrey Skilling, former WorldCom executive Bernard Ebbers and Ponzi scheme mastermind Bernard Madoff.

The insider trading case was the most prominent of its kind since Ivan Boesky was convicted a generation ago.

FDA Chemist, Son Charged With Insider Trading

A chemist with the Food and Drug Administration and his son were arrested Tuesday on charges of running a $2.27 million insider trading scheme.

Prosecutors say Cheng Yi Liang, 57, and his son, Andrew Liang, 25, used confidential information from a password-protected FDA tracking system to buy and trade the stocks of companies with pending drug applications. Both were arrested Tuesday on charges including securities fraud and wire fraud and made an initial court appearance in U.S. District Court in Greenbelt, Md.

Their lawyers did not immediately return calls seeking comment.

A criminal complaint charges the men, both of Gaithersburg, Md., with trading on inside information from November 2007 to this month. Prosecutors say the father and son used the proceeds to pay for travel and credit card bills and to buy new cars, prosecutors said.

Prosecutors say that by accessing an internal FDA database used to track and receive drug applications, Cheng Yi Liang repeatedly obtained inside information on when the agency would make a decision on drug applications and what that decision would be. He and his son would then use that information to purchase and trade the companies' shares days ahead of the FDA's formal announcement, according to the complaint. Federal authorities say they were able to take screen shots of Cheng Yi Liang's work computer that show him entering the database, which warns users that it is for "U.S.-government authorized use only."

In one example cited by the complaint, the men allegedly acquired 48,875 shares of Clinical Data Inc. after learning through the secure database that the company's anti-depression drug, Viibryd, was about to win approval. The drug was approved three days later, and the men sold their shares for a profit of more than $379,000, according to the complaint.

The FDA said in a statement that it was aware of the arrests. Cheng Yi Liang has worked for the FDA since 1996.

"The agency is cooperating fully with the authorities and will review the situation and take any appropriate action," the statement said.

In a related action, the Securities and Exchange Commission filed civil insider-trading charges against Liang. In a lawsuit filed in federal court in Greenbelt, the SEC is seeking unspecified restitution and fines against him.

"Liang victimized both the investors who were disadvantaged by his theft of inside information and the American citizens whose trust he violated by placing private gain above public good," SEC Enforcement Director Robert Khuzami said in a statement.

Liang has worked at the FDA since 1996 in the Office of New Drug Quality Assessment and had access to the agency's internal tracking system for new drug applications. He earned a salary of $122,744 a year, according to a court document.

He was able to monitor confidential information about whether and when the FDA was about to approve certain drug applications. He and his son used several brokerage accounts to execute trades, prosecutors said.

One account was in the name of Liang's 84-year-old mother, who lived in China, according to the SEC.

They used a home equity line of credit taken out on their primary house to fund the insider trading activity and used the profits to buy another property, according to a court filing.

They also used the funds to buy cars, pay for travel and pay credit card bills, the Justice Department said.

Investigators installed software on Liang's computer in January that collected screen shots, revealing he was collecting information about drug approvals, including for Clinical Data Inc's anti-depressant Viibryd.

On January 18, within minutes of reviewing an internal document recommending approval, several accounts controlled by Liang and his son bought nearly 5,000 shares of the stock, according to prosecutors.

They eventually bought nearly 50,000 shares before the January 21 announcement and made more than $379,000 in profit after the stock rose some 67 percent on the approval news.

The cases are: USA v Cheng Liang, No. 11-mj-01236; USA v Andrew Liang, No. 11-mj-01237 and SEC v Liang, No. 11-cv-00819 in U.S. District Court for the District of Maryland.

In addition, the agency named as relief defendants Liang's wife Yi Zhuge and the holders of the seven trading accounts he allegedly used. They are not accused of wrongdoing but the SEC is seeking to recover funds from them which it says they aren't entitled to. The account holders are named as Liang's mother Hui Juan Chen, his son Andrew, Shuhua Zhu, Zhongshan Chen and Honami Toda.

The FDA produced this trade chart, going back to 2006, explaining the trades.

Three Hedge Funds Raided As Insider Trading Probe Widens

FBI agents raided the offices of three hedge funds Monday with more expected to follow as part of a broad insider trading investigation.

Authorities had raided the Connecticut offices of Diamondback Capital Management and Level Global Investors. Both funds are run by former managers of Steve Cohen's SAC Capital Advisors. The raids were first reported by The Wall Street Journal and confirmed by CNBC.

The third raided hedge fund is Loch Capital Management. It is based in Boston, is headed by Timothy and Todd McSweeney. The brothers are acquaintances of Steven Fortuna, a hedge-fund manager who pleaded guilty in the Galleon case and agreed to cooperate in that investigation, the Journal reported.

David Ganek, a former SAC trader, manages about $4 billion in assets through Level Global Investors. Diamondback Capital Management oversees more than $5 billion, while Loch Capital Management maintains $750 million in assets, the Journal said, citing SEC filings.

"We received an inquiry this morning from the FBI," Diamondback Capital said in a statement. "Diamondback is voluntarily cooperating. The firm is fully operational and we, along with our team, continue to manage the portfolio and Diamondback's business for the benefit of our investors."

A spokesman for Level Global confirmed that federal agents had searched the company's offices and that the hedge fund is cooperating with authorities. A lawyer for Loch Capital declined to immediately comment on Monday, the Journal reported.

The raid follows a Journal report this weekend that federal authorities were preparing a slew of insider trading chargers against the $1.7 trillion hedge fund industry. The probe into allegations of widespread misconduct will likely involve consultancies, investment banks and trading firms, reported the Journal.

The charges, which could be filed as soon as this year, would be on top of those made in an existing case against Raj Rajaratnam and his hedge fund, the Galleon Group.

Twenty-three former hedge fund managers, lawyers and others have faced criminal or civil charges in the case, which prosecutors called the largest insider trading case in hedge fund history. Fourteen have pleaded guilty to criminal charges, eight have pleaded not guilty and one is at large.

Although it has not been implicated in any of the charges, Goldman Sachs shares suffered today amid worries that the bank may be embroiled in the investigation.

Santander Analyst Accused of Insider Trading in Potash Takeover Bid

(Bloomberg) -- A Banco Santander SA analyst and an accomplice illegally reaped almost $1.1 million with insider trades before BHP Billiton Ltd.’s $39 billion takeover bid for Potash Corp. of Saskatchewan Inc., U.S. regulators said.

Juan Jose Fernandez Garcia, 35, and Luis Martin Caro Sanchez, 36, used accounts at the same U.S. brokerage to buy more than $61,000 in Potash stock options days before BHP’s offer became public Aug. 17, the Securities and Exchange Commission said in documents filed Aug. 20 in federal court in Illinois. Fernandez Garcia heads the bank’s European equity derivatives research, according to the agency’s complaint.

The men “tried to move offshore highly suspicious trading profits made just a few days before,” said Daniel Hawke, who leads a group at the SEC that polices market abuse, in a statement yesterday. “We will act swiftly and decisively to deny wrongdoers the profits of their illegal activity.”

Santander provisionally suspended Fernandez Garcia while inquiries continue, the bank said in a statement sent by e-mail.

“The bank has acted at all times following the appropriate procedures,” Santander said. “We are awaiting the results of both our internal and the supervisors’ investigations, with whom the bank will cooperate.”

The SEC said it doesn’t know of lawyers representing the defendants. An e-mail to Fernandez Garcia was answered with an automated reply saying he will be out of office until Sept. 9. A phone number for Caro Sanchez couldn’t immediately be found.

BHP Advisers

Santander is one of five banks advising BHP on its bid for Potash Corp., along with JPMorgan Securities Inc., TD Securities Inc., Barclays Capital, BNP Paribas SA and Royal Bank of Scotland Group Plc.

The insider trading case is a matter for Santander, not BHP, Marius Kloppers, chief executive officer of the world’s biggest mining company, told reporters in London today.

“Clearly it is an issue where more press about something is not useful in a bid” situation like this, Kloppers said. “I would preferred not to have had the press.”

Potash shares jumped 28 percent on the day the Saskatoon, Saskatchewan-based company said it had rejected a takeover offer from BHP, the world’s largest mining company. Melbourne-based BHP took its $130-a-share cash bid directly to Potash investors.

SEC Complaint

In its complaint, the SEC asserted that the two defendants had “material, nonpublic information” about BHP’s proposal, without specifying how they obtained it. A judge temporarily froze their accounts, according to the agency’s statement.

From Aug. 12 to Aug. 16, Fernandez Garcia purchased a total of 282 call options for about $13,700, the SEC said in the complaint. He sold them on Aug. 17 for a profit of about $576,000. Caro Sanchez bought $48,000 of call options, making a profit of $497,000, according to the complaint.

“Global corporate clients would expect compliance structures to be in place to prevent this sort of thing,” said Peter Hahn, who lectures on corporate finance at the Cass Business School in London. “Santander has been a bank that has been widely admired for its focus on retail-led commercial lending.”

Santander, which relies on retail banking business from Spain to Brazil and the U.K. for more than 70 percent of profit, has been building up its wholesale banking business.

Adolfo Lagos, head of Santander’s global banking and markets unit, said in a December interview he planned to hire 200 bankers after taking business from rivals hurt by the financial crisis. Santander ranks 14th among top the global financial advisers this year with $83.6 billion of business volume, according to data compiled by Bloomberg.

Juan Jose Fernandez Garcia's profile on linkedin
http://es.linkedin.com/pub/juan-jose-fernandez-garcia/7/2a/a20

Equity Derivatives Research at Santander Bank

Current
Equity Derivatives Research at Santander Bank (Treasury)

Past

• Equity Derivatives and Delta 1 research at Santander Investment
• Quant Strategist Analyst at grupo ahorro corporacion
• Quantitative Derivatives Analyst (Equity, Fixed Income, Money Markets) at Grupo Ahorro Corporacion

Education

• Universidad Carlos III de Madrid
• Universidad Rey Juan Carlos
• CFA Institute

Juan Jose Fernandez Garcia’s Summary

Head of European Equity Derivatives Research at Banco Santander.

Publication of ED research based on IBEX 35 and Euro Stoxx 50 stocks; conducting ongoing & innovative research of options & volatility related themes; Reports published and available upon request.

Some examples of my research are published at: http://www.cboe.com/Institutional/reports.aspx

Regularly interacting with clients for supporting the marketing activities and work with traders & sales specialists for the marketing activities of the firm with regards to the research published;

Former-IBM Executive Claims His Mistress Made Him Do It

Above: Danielle Chiesi

A former executive at IBM, who was once considered for the role of CEO, has claimed he was “played” by a mistress to provide details of data used to inform insider trades.

The legal team representing Robert Moffat submitted papers to a US court stating that his “intimate and personal relationship” with Danielle Chiesi, a trader at New Castle Funds, led to the tips being provided.

Mr Moffat pleaded guilty to charges of conspiracy and securities fraud earlier in the year as one of numerous persons involved in an alleged insider trading ring within the Galleon Group.

Ms Chiesi has pleaded not guilty as part of a different trial to Galleon Group co-founder Raj Rajaratnam, who has also filed a not-guilty plea.

Papers filed in the court by the Mr Moffat’s legal team, which were quoted by Bloomberg, said: “Ms. Chiesi was not the passive recipient of information from Mr Moffat. To the contrary, she manipulated or 'played' him to obtain information she could use to New Castle’s advantage.”

“Bob’s personal relationship with Ms. Chiesi unfortunately led him to lose sight of the principles that he had lived by.”

Mr Moffat is due to be sentenced on September 13th.

Former-Citigroup trader accused of providing confidential data to Deutsche Bank

Gautam Hazarika, an ex-trader at Citigroup, is being sued by his former employers for allegedly handing over confidential information to Deutsche Bank, a newspaper report has claimed.

According to Bloomberg, the banker sent messages containing trade secret details to the financial services provider, Standard Chartered and his own personal email account.

The trader, who now works as the head of corporate flow sales for Deutsche Bank in Asia, has denied the allegations.

He spent 15 years working for Citigroup in various locations across Asia.

An investigation was launched by Citigroup after a senior executive at the financial service provider heard how Mr Hazarika had given Deutsche Bank “everything” when he joined.

Siraj Omar, head of litigation at Premier Law, told the news provider that the case showed how increasingly competitive banks have become over the contact books of traders.

“The idea is to make things as difficult as possible for the bankers who are leaving, which is only logical from the banks’ perspective,” he explained.

Mr Hazrika was reported by Bloomberg as saying he had done nothing wrong.

Berkshire Hathaway investment in Goldman Sachs 'part of Galleon probe'

Berkshire Hathaway's $5 billion investment in Goldman Sachs is being probed as part of the Galleon Group insider trading ring investigation, it has been reported.

Galleon Group founder Raj Rajaratnam was arrested last year in allegations that claim he was the center of a massive insider trading scam.

Last month, a court filing related to the case stated that Mr Rajaratnam and his alleged co-conspirators had been trading on information involving Goldman Sachs.

An inside source has told the Wall Street Journal government investigators are now looking into claims that Goldman Sachs director Rajat Gupta passed on information to Mr Rajaratnam about Berkshire Hathaway's investment before the deal was made public.

Mr Gupta has not been charged in relation to the case and his lawyer Gary Naftalis said: "Rajat has neither violated any law nor done anything else improper.

"He has always conducted himself with integrity in his business, philanthropic and personal life."

The allegations mark a bad month for Goldman Sachs, which has also been accused of fraud by the Securities and Exchange Commission in a separate case.

It is claimed the bank sold an investment package to investors that was designed to fail.

Goldman Sachs board member quizzed over insider trading

Rajat Gupta, a member of Goldman Sachs’ board of directors, is under investigation for allegedly providing insider information to the Galleon Group founder Raj Rajaratnam, a newspaper report has claimed.

Unnamed sources close to the matter told Wall Street Journal that Mr Gupta, thought to be an associate of Mr Rajaratnam, is being investigated.

Mr Rajaratnam is one of 22 traders charged over alleged involvement in what is thought to be one of the largest insider trading rings of all time.

A recent letter, filed in court last week, revealed that stocks in Goldman Sachs, along with Cisco and AT&T, were among those illegally traded by the Galleon Group founder and his accomplices.

A spokesman for the member of Goldman Sachs’ board told the news provider: “Mr Gupta is unaware of any examination of any such issue and has done nothing wrong.”

No criminal charges have been filed against the banker.

Meanwhile, Mr Rajaratnam and his colleague Danielle Chiesi both deny the charges against them.

A trial is expected to begin at a federal court in New York later this year.

FSA insider trading probe leads to six arrests in Great Britain

An investigation into insider trading undertaken by the Financial Service Authority (FSA) and the Serious Organised Crime Agency (SOCA) has led to six arrests.

According to the regulatory body, two senior executives and one professional from a hedge fund are among those arrested in connection with insider deals.

The unnamed workers were taken into custody following searches in 16 locations across London, the South East and Oxfordshire.

A number of computers and documents were seized from addresses, which included both business and residential premises.

In a statement, the FSA said: “It is believed that the city professionals passed inside information to traders (either directly or via middlemen) who traded based on this information and have made significant profits as a result.”

The investigation is the fifth set of arrests in conjunction with insider dealing that the organisation has carried out since 2008.

A number of traders have recently been imprisoned due to their involvement in insider deals.

Malcom Calvert, Matthew and Neel Uberoi and Christopher McQuoid and James Melbourne are the individuals which have received jail sentences following an investigation by the FSA.

Ex-Investment Banker Charged With Insider Trading

(Bloomberg) -- Christian Littlewood, a former banker at Shore Capital Group Plc and Commerzbank AG’s Dresdner Kleinwort, and his wife have been charged with insider trading by the U.K. financial regulator.

Littlewood, faces 13 counts of insider trading with his wife, Angie Littlewood, the Financial Services Authority said today in a statement. A third suspect from Singapore was arrested in the Comoros Islands, a French territory off the coast of Africa, in connection with the case, the FSA said.

Last week the agency won an insider-trading case against Malcolm Calvert, an ex-partner at JPMorgan Chase & Co.’s Cazenove unit. It was the first time the regulator successfully tried a finance professional after previously convicting a former company lawyer and a brokerage intern and his dentist father in two other cases.

“This is the sort of case that the FSA should be bringing in order to achieve effective deterrence, rather than cases against a dentist and intern,” said Angela Hayes, a London- based regulatory lawyer at Mayer Brown LLP, who isn’t involved in the matter. “The FSA is on a roll at the moment. Not only has it upped its employment of people with criminal-prosecution skills, but it is also using senior criminal barristers.”

Seeking Extradition
Littlewood and his wife are charged in connection with trading of shares listed on London’s Alternative Investment Market between 2000 and 2009, the FSA said. The FSA is seeking the extradition of the third person, the first time it has asked for a suspect in a criminal case to be sent to the U.K.

Littlewood, a senior corporate finance adviser at Dresdner until 2003, was arrested in April 2009. He left Shore Capital shortly after, according to the FSA’s register.

No contact information for Littlewood was available and the regulator couldn’t provide contact information for his lawyers. No one was immediately available to comment at London-based Shore Capital.

The FSA said separately today that it and the police had contacted 1,000 people on a “master list” used by scammers in boiler-room schemes. Boiler rooms are fake brokerages, often based overseas and beyond the reach of the regulator, which target investors with high pressure sales tactics to sell shares that turn out to be very risky or worthless.

Ex-Cazenove broker accused of insider trading

A former partner at JPMorgan offshoot Cazenove is accused of receiving cash at race courses in the UK in exchange for insider information.

The Financial Services Authority (FSA) has launched legal proceedings against Malcolm Cavert, a 65 year-old stockbroker, who stands accused of 12 counts of insider trading, alleged to have taken place between April 2003 and March 2005.

He is reported to have received profits from deals in the form of cash handed over in envelopes at race courses across the UK.

The stockbroker is believed to have received tips and market data from an unknown source at the investment bank.

Information was then passed onto his friend Bertie Hatcher, who is thought to have used the market data to invest in shares in six different companies, which earned the pair £280,000.

After selling the shares, two-thirds of the profit was paid to Mr Cavert by his friend and business partner.

However, Mr Hatcher said in a statement that there was nothing “illicit” about the deals - it “just suited us both”.

The latter is unable to testify in person due to being too ill to make it to court.

Seven more indicted in Galleon case

Seven more people have been indicted in the Galleon Group insider trading ring court case.

Previously only two people had been indicted – Danielle Chiesi and Galleon Group founder Raj Rajaratnam.

Another seven people have already entered guilty pleas in regard to the case.

Among those brought before a grand jury this week are Zvi Goffer, a former Galleon Group employee who went on to found trading firm Incremental Capital.

Prosecutors have claimed that Mr Goffer played a leading role in the insider trading – he is alleged to have passed out prepaid phones to tippers to limit the chances of them getting caught.

He was also nicknamed 'Octopussy' by investigators on the grounds of his reported ability at getting hold of insider information.

Others charged in the latest indictment include Mr Goffer's brother Emanuel, Incremental workers Michael Kimelman and David Plate and two lawyers, Jason Goldfarb and Arthur Cutillo.

Last month, insiders told Bloomberg that Galleon Group is to shut down its operations in Singapore as the company is put through liquidation.

Canadian lawyer jailed over $9m of insider trading scams

A lawyer in Canada has been sentenced to 39 months in prison after a court found him guilty of being involved in an insider trading ring.

Stan Grmovsek, a former lawyer, pleaded guilty to committing crimes with a school friend using insider information which helped earn the pair $9 million over a 14 year period.

Mr Grmovsek’s accomplice, Gil Cornblum, committed suicide days before the pair were due to plead guilty to the charges in October 2009.

The duo obtained confidential information while working as lawyers across the US and Canada to inform their business decisions.

Mr Grmovsek’s sentence is thought to be the longest given for such an offence in Canada.

Kelley McKinnon, a securities lawyer with Gowling Lafleur Henderson LLP and former deputy director of enforcement with the Ontario Securities Commission, told the Globe and Mail: “This is a critical precedent that changes the stakes in future cases and should act as a meaningful deterrent.”

Mr Cornblum practiced at Sullivan & Cromwell and was a partner at Dorsey & Whitney between 1994 and 2008.

McKinsey director paid $2.6m for role in Rajaratnam insider trading

Anil Kumar, a former director at management consultancy McKinsey & Co, has admitted to his involvement in the Galleon Group insider trading ring.

As part of his guilty plea, Kumar said that he had received $1.75 million by Galleon Group founder Raj Rajaratnam for inside information about clients of McKinsey.

Kumar added that he had received a total of around $2.6 million for his role in the scam.

He said he received payment for his services from the Galleon Group via a Swiss bank account – money he then invested in the hedge fund using an account in the name of one of his employees at home.

Kumar met Rajaratnam in the 1980s when the pair attended the Wharton School of Business at the University of Pennsylvania.

After admitting his guilt, Kumar offered an apology to his former colleagues.

"I understood Mr Rajaratnam was going to trade securities. I understood that my conduct was unlawful," he said.

"To all my colleagues whose trust I have betrayed, I am sorry."

The insider trading relating to Kumar's case centered around the acquisition of ATI Technologies by Advanced Micro Devices (AMD).

Kumar's claims have been denied by lawyers for Rajaratnam, who insist no such payments were made.

John Dowd, Rajaratnam's lawyer, said that Galleon Group's making of investments based on a potential merger did not mean it had insider knowledge of the deal.

"An analyst's prediction that AMD would acquire ATI was widely reported in the press more than seven weeks before the acquisition was announced," he stated.

In November last year, Hector Ruiz, the chairman of AMD, resigned from his role at the company after it was alleged in widespread newspaper reports that he had also passed on secret information about the company to the insider trading ring.

However, no charges have been bought against Mr Ruiz by US prosecutors.

Former McKinsey tipster netted $2.6m

Financial Times - Former McKinsey director Anil Kumar on Thursday agreed to forfeit $2.6m prosecutors said he received for passing along confidential tips to Raj Rajaratnam, the Galleon hedge fund founder accused of masterminding a vast insider trading scheme.

The agreement came as Mr Kumar became the seventh person to plead guilty in the case. Prosecutors said that he was initially approached by Mr Rajaratnam in late 2003 or early 2004 and offered $500,000 a year to provide information about companies that he had access to through McKinsey.

The funds were allegedly paid by Mr Rajaratnam and were deposited for Mr Kumar in a Swiss bank account. Some of the money was reinvested for Mr Kumar through an account with Galleon, prosecutors said. He was paid $1.75m directly and earned a total of $2.6m through his involvement with the alleged Galleon scheme.

A visibly emotional Mr Kumar, appearing before Judge Denny Chin, “profusely” apologised to his colleagues and friends for the “shame and embarrassment they suffered”.

Mr Kumar, who was accused of passing on information about Advanced Micro Devices, a company he advised while at McKinsey, was part of the first group of people to be charged in the insider trading investigation, which has ensnared top executives across corporate America since the first arrests were made in October.

Prosecutors said that one of Mr Kumar’s most profitable tips related to AMD’s 2006 acquisition of ATI Technologies. The information netted Galleon $19m and prosecutors said that after the deal Mr Rajaratnam called Mr Kumar a “hero”.

Mr Rajaratnam’s lawyer, John Dowd, has denied that his client paid for information relating to that deal, arguing that he had used public information.

“Raj Rajaratnam did not make payments to Mr Kumar or anyone else in return for providing inside information,” Mr Dowd said.

Mr Rajaratnam has been accused of making $36m in illicit profits through the scheme. A total of 21 people have been accused in the case and the investigation is ongoing. Mr Rajaratnam has maintained his innocence.

By pleading guilty to securities fraud and to conspiracy to commit securities fraud, Mr Kumar faces up to 25 years in prison. On Wednesday he signed a plea agreement that he knowingly joined the scheme and did something that was illegal. Under the deal he also agreed to forfeit the $2.6m.

Robert Morvillo, Mr Kumar’s attorney, told the court that his client would work with law enforcement officials “in an attempt to rectify the consequences of his conduct”.

“He is pained by the fact that he has embarrassed and let down his colleagues at McKinsey, all of whom have always treated him kindly and generously,” Mr Morvillo said. “He apologises to all he has hurt and greatly regrets his lapse of judgment.”

Hector Ruiz implicated in Galleon insider trading scandal

Hector Ruiz, the former chief executive officer of technology company Advanced Micro Devices (AMD), has been implicated in the Galleon insider trading scandal, according to media reports.

Earlier this month, Raj Rajaratnam, the billionaire founder of the Galleon hedge fund, was arrested over allegations he had masterminded the biggest insider trading scam in history.

Five others were arrested with him and in the complaint filed against one of them, Danielle Chiesi, prosecutors alleged an unnamed AMD executive was guilty of passing on secret information in order to trade stocks.

According to prosecutors, the unnamed executive told Ms Chiesi in August 2008 that AMD's manufacturing operation was about to enter into a venture with the Abu Dhabi government.

The partnership between Abu Dhabi and AMD, which was announced to the public in October 2008, led to the foundation of technology manufacturer Globalfoundaries.

An anonymous source has revealed Mr Ruiz, who is now chairman of Globalfoundaries, to be the unnamed executive.

Mr Ruiz is not a defendant in the case but his alleged involvement in the scam, which has been denied by all of the arrested parties, is sure to damage his considerable reputation.

He took the top job at AMD in 2002 and under his tenure the company made gains against Intel, its largest competitor in the sector.

But the purchase of graphics-chip maker ATI Technologies for $5.4 billion left AMD heavily in debt and by 2008 Intel had re-established its market dominance over his firm.

The formation of Globalfoundaries was a key part of Mr Ruiz's strategy to recover market position.

Both Galleon and hedge-fund New Castle, where Ms Chiesi worked, bought shares in AMD before the transaction was announced on October 7th 2008, an announcement date that Mr Rajaratnam had predicted to Ms Chiesi a week before.

Earlier this month, the Sri Lankan government said that Mr Rajaratnam had used the money he made through the scheme to help fund the Tamil Tigers, a terrorist organisation operating in his home country.

IBM's Robert Moffat placed on leave following insider trading arrest

IBM senior executive Robert Moffat has been placed on leave by the company following his arrest for insider trading last week.

The charges relate to a hedge fund run by billionaire businessman Raj Rajaratnam.

Mr Moffat, who a the senior vice president and head of IBM's systems and technology group, has been charged with giving insider information to Mr Rajaratnam's hedge fund, the Galleon Group.

It is alleged that Mr Rajaratnam made around $18 million from the scam.

The Sri Lankan government has also accused him of using the money to help fund the Tamil Tigers, a terrorist group.

Mr Moffat is also accused of passing on information about Sun Microsystems when he was completing due diligence on the company for IBM.

Edward Barbini, an IBM spokesman, said: "In view of a US federal investigation into his personal activities, Mr Moffat has been placed on temporary leave of absence and is no longer serving as an officer of IBM."

The company has named Rodney Adkins as acting head of the systems and technology group.

Mr Moffat denies the allegations.