Bloomberg News

Deep Shah Tips Resulted in $8.2 Million in Profit, SEC Says

June 24, 2011

(Updates with amount of disgorgement sought in third paragraph.)

June 24 (Bloomberg) -- Illegal tips from former Moody’s Investors Service Inc. analyst Deep Shah, declared a fugitive in the insider trading case of Galleon Group LLC co-founder Raj Rajaratnam, resulted in $8.2 million in profits, the U.S. Securities and Exchange Commission said in court papers.

The SEC yesterday filed papers seeking a default judgment against Shah, claiming he hasn’t responded to its suit filed in 2009. The complaint was served on Shah in Mumbai, according to the SEC.

The agency claims Shah passed along inside information about acquisitions involving Hilton Hotels Corp. and Kronos Inc. It is seeking $9.9 million in disgorgement, which includes illegal cash payments to Shah, profits reaped by his downstream tippees and interest.

In 2009, Shah was charged criminally by prosecutors in the office of Manhattan U.S. Attorney Preet Bharara. A lawyer for Shah couldn’t be located.

The case is Securities and Exchange Commission v. Galleon Management LP, 09-cr-8811, U.S. District Court, Southern District of New York (Manhattan).

--With assistance from Patricia Hurtado in New York. Editors: Fred Strasser, Glenn Holdcraft

To contact the reporter on this story: Bob Van Voris in New York at pathurtado@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net


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