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Former beauty queen Danielle Chiesi has agreed to pay $540,000 (£335,000) to settle civil charges concerning insider trading by the Galleon hedge fund of shares in AMD, IBM and other companies.

Former beauty queen Danielle Chiesi has agreed to pay $540,000 (£335,000) to settle civil charges concerning insider trading by the Galleon hedge fund of shares in AMD, IBM and other companies.

Chiesi still faces a possible prison sentence. A former hedge-fund trader, she earlier this year pleaded guilty to criminal charges in the Galleon case, and has agreed to pay the settlement cash to the Securities and Exchange Commission (SEC).

Court evidence said Chiesi, 45, was involved in illegal trades with Galleon Group founder Raj Rajaratnam, who was convicted on insider-trading charges in May.

Before Rajaratnam's conviction, Chiesi, along with almost 30 others, had pleaded guilty to criminal insider trader charges, which related to illegal trades in companies including AMD, 3Com, IBM and Intel. Chiesi is scheduled to be sentenced on 20 July 20 in a New York federal court. She is said to face more than three years in prison.

Chiesi worked at Bear Stearns. As part of the SEC settlement, the government sought the return of her salary and bonuses during the time she passed insider tips about technology companies.

In court evidence during the Rajaratnam case, US government witnesses alleged that Hector Ruiz, chief executive at AMD between 2002 and 2008, had had an “intimate relationship” with Chiesi while at the helm of AMD. Ruiz was not  charged with any involvement in insider trading, and he said the relationship with Chiesi "was not intimate".

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Chiesi was also accused in court of having an intimate relationship with Robert Moffat, a former IBM senior VP, and using information from him. Moffat has pleaded guilty to insider-dealing.

She was also alleged to have gleaned inside information from google and Sun Microsystems.