Morgan Stanley banker drawn into Galleon investigation - WSJ

Mon Jan 24, 2011 12:52am EST

Jan 24 (Reuters) - A Morgan Stanley banker named Kamal Ahmed is under investigation by U.S. authorities for leaking information regarding an upcoming takeover that ultimately was passed on to Galleon Group founder Raj Rajaratnam, the Wall Street Journal said, citing people close to the situation.

Ahmed is the first Wall Street banker publicly drawn into the investigation into Galleon, whose founder Rajaratnam faces insider trading charges, the Journal said.

According to a Jan. 20 letter from prosecutors to Rajaratnam's lawyers, the Morgan Stanley banker around May 2006 leaked details of Advanced Micro Devices Inc's interest in buying ATI Technologies Inc, and that news of a pending takeover was later funneled to Rajaratnam.

The letter had blacked out the identities of the banker and the person who allegedly tipped Rajaratnam.

"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," Ahmed's lawyer, Douglas Tween, told the Journal.

Morgan Stanley spokesman Pen Pendleton told Reuters on Friday the banker has been put on leave, and that the company is cooperating with the government's investigation.

Ahmed's lawyer Douglas Tween could not immediately be reached for comment by Reuters outside regular U.S. business hours. (Reporting by Sakthi Prasad in Bangalore; Editing by Dhara Ranasinghe)

(Created by Dhara Ranasinghe)

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