November 21, 2013 / 8:00 PM / 4 years ago

UPDATE 1-US SEC charges ex-Marvell worker in Galleon insider-trade scheme

3 Min Read

By Sarah N. Lynch

WASHINGTON, Nov 21 (Reuters) - A former Marvell Technology Group Ltd employee will pay $60,000 to settle civil charges that he offered insider tips to a hedge fund manager with ties to Galleon Group, U.S. regulators said Thursday.

Sam Miri, who worked at Marvell's communications division, will also be barred from serving as an officer or director of a public company, the Securities and Exchange Commission said.

A lawyer for Miri could not be immediately reached.

The SEC alleges that Miri gave former Galleon portfolio manager Ali Far information that was not publicly available about Marvell's financial performance.

Far, who later pleaded guilty to criminal charges in the Galleon matter, used the information to trade on behalf of Spherix Capital, a hedge fund he founded.

More than 80 people and entities have been charged criminally in connection with the government's probe into insider trading.

The probe also ensnared the founder of the now-defunct Galleon, Raj Rajaratnam, who in 2011 was convicted on 14 criminal counts and is serving an 11-year sentence.

Miri's name surfaced in connection with the probe as far back as 2009, when Far became a cooperating witness for the government and admitted he had paid an official at a publicly traded technology company.

Reuters reported at the time that Far was referring to Miri, citing a person familiar with the matter.

For his cooperation with the government, Far was sentenced to one year of probation.

According to the SEC's civil complaint on Thursday, Miri tipped Far in May 2008 about Marvell's plans to announce a permanent chief financial officer and also provided details about the company's earnings before they were public.

In the days before the company's announcement, Spherix Capital hedge funds bought 300,000 shares of Marvell stock, allowing them to reap $680,000 in ill-gotten gains, the SEC said.

In exchange for the tips, Far made four quarterly payments to Miri totaling roughly $10,000, the SEC added.

The SEC said its investigation is continuing.

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