SEC Settles Insider Trading Charges Against Kris Chellam In Connection With The Galleon Funds

SEC v. Kris Chellam, Case No. 12-CIV-7983 (S.D.N.Y).  On October 26, 2012, the SEC announced settled insider trading charges against Silicon Valley executive Kris Chellam.  Chellam tipped convicted insider trader Raj Rajaratnam by telling him that Xilinx, Inc. would not meet its revenue projections.  Rajaratnam engaged in short selling based on the information and made more than $975,000 in illegal profits.  Chellam tipped Rajaratnam when he was invested in the Galleon funds and when he was in discussions about employment with Galleon.  Chellam was subsequently hired.  Without admitting or denying the allegations, Chellam consented to entry of a judgment enjoining him from future violations of Section 10(b) of the Exchange Act and Rule 10b-5, and Section 17(a) of the Securities Act.  He will pay $675,000 in disgorgement, $106,383.05 in prejudgment interest, and a $978,684 civil monetary penalty. Chellam will also be barred for a period of five years from serving as an officer or director of a public company.

The SEC has now charged 32 defendants in its Galleon-related enforcement actions.  According to the SEC, the alleged insider trading has occurred in the securities of more than 15 companies for illicit profits totaling approximately $93 million.

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