Ex-confidante of hedge fund billionaire Raj Rajaratnam jailed
Danielle Chiesi, the former beauty queen turned stock trader, has been sentenced to two-and-a-half years in jail for her role in the biggest insider-dealing case in decades.
Chiesi, 45, was the former confidante of hedge fund billionaire Raj Rajaratnam, founder of the Galleon hedge fund. She pleaded guilty to three criminal counts of conspiracy to commit securities fraud in January, in a move that was seen as a major breakthrough for the prosecution.
Judge Richard Holwell sentenced her to 30 months in jail, less than the 46 months that prosecutors had asked for. Alan Kaufman, her lawyer, argued that Chiesi, who once compared trading on inside information with an orgasm, had never used the insider information in her personal accounts. He said she was the victim of a "toxic" sexual relationship with Mark Kurland, her former boss and lover at trader New Castle Partners. Kurland, who also pleaded guilty in the Galleon case, is serving 27 months.
According to a letter filed with the court by Chiesi's boyfriend, identified only as "Billy," Chiesi was manipulated by Kurland, who engaged in a "vicious cycle of abuse" and "psychological exploitation" to turn her into his "virtual servant". Chiesi was the 10th person to be sentenced after an insider-dealing investigation that has secured 46 guilty pleas and convictions. After the verdict Kaufman said there was "relief that this was over".
Chiesi was one of the contacts prosecutors argued fed illegal inside information to Rajaratnam, who once ran one of the biggest hedge funds in the world. He was convicted on 14 counts of fraud and conspiracy after a jury heard secretly tapped telephone conversations of him discussing trades with Chiesi and others in top companies including Goldman Sachs, Google and Hilton. Rajaratnam is now awaiting sentencing.
Outside court Chiesi told reporters: "I told the FBI if they are ever going to knock on my door again, do it in the afternoon. Not at 6am."
Source: http://www.guardian.co.uk/business/2011/jul/20/danielle-chiesi-awaits-sentence
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