Morgan Stanley banker drawn into AMD insider trading case

A Morgan Stanley banker has been drawn into the wide US federal investigation into the alleged insider dealing of stocks of technology companies.

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A Morgan Stanley banker has been drawn into the wide US federal investigation into the alleged insider dealing of stocks of technology companies.

Kamal Ahmed, 42, was named by the Wall Street Journal as the first banker publicly drawn into the Galleon investigation.

Galleon is a hedge fund, and its founder Raj Rajaratnam and others are accused of forming a network of informants inside technology companies to get valuable inside information for trading stocks illegally.

According to the WSJ, Ahmed is accused of tipping a Rajaratnam associate off about a merger deal involving chip maker AMD in 2006.

A government court filing last week claims a Morgan Stanley banker informed another person that ATI Technologies was going to be acquired by AMD. The filing says that other person then told Rajaratnam about the acquisition.

Ahmed was put on leave by Morgan Stanley last week. His lawyer, Douglas Tween, told the paper: "Mr Ahmed is cooperating with Morgan Stanley in its investigation and we are confident when all the facts are known it will be shown that he did nothing illegal or unethical."

A Morgan Stanley spokeswoman said: "We have placed the banker on leave and are fully cooperating with the government's investigation."

A number of others have already pleased gulity to insider trading charges in connection with the Galleon case, but Rajaratnam maintains his innocence.

Last week, market analyst Danielle Chiesi pleaded guilty to insider trading charges. She is said to have milked sensitive information from a former IBM executive for illegal trades.

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