The SEC has charged a Silicon Valley executive with tipping off Raj Rajaratnam about a stock short opportunity.
The agency alleges Kris Chellam tipped Rajaratnam in December 2006 with confidential details indicating Xilinx Inc., a programmable device company, would fall short of revenue projections it had previously made publicly.
The complaint describes Chellam as a "close friend" of Rajaratnam's, adding that at the time of the tip-off he had significant investments in Rajaratnam's Galleon funds and was looking to get hired there.
That eventually happened, in May 2007.
Chellam, who lives in Saratoga, Calif., has agreed to pay more than $1.75 million to settle the SEC’s charges. The settlement is subject to court approval.
Rajaratnam was convicted of insider trading and sentenced to 11 years in prison.
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