Oct. 17--Mercury News

In a dramatic insider-trading case unprecedented in scope and involving some of Silicon Valley's iconic tech giants, federal prosecutors on Friday charged six money managers and hedge-fund operators -- including two from the South Bay -- with conspiracy and securities fraud, alleging the defendants earned $20 million selling and trading on secrets of firms including Intel and Google.

In addition to Raj Rajaratnam, founder of the New York hedge fund Galleon Group and one of the richest men in the world, those charged by authorities include two well-known Valley operators -- Rajiv Goel, an executive at Intel's treasury department, and Anil Kumar, an executive at the global consulting group McKinsey & Company.

With equal parts Silicon Valley tech-frenzy and Wall Street intrigue, the narrative laid out in court documents reveals an ambitious plot, laced with stealth stock trades and what seems to be thickening paranoia.

"I'm dead if this leaks," says defendant Danielle Chiesi, caught on tape as she talks to an unnamed alleged co-conspirator. "I really am ... And my career is over. I'll be like Martha f--ing Stewart."

In another wiretap, defendant Mark Kurland tells Chiesi to watch her back.

"Don't put anything on email," he warns her. "Don't email even Raj [Rajaratnam] or anybody. Be Careful."

Prosecutors in New York accused Rajaratnam, 52, with illegally obtaining and trading on

information on companies including Polycom, a Pleasanton video-conferencing company, and Hilton Hotels, charging him with 13 counts of conspiracy and securities fraud. Also charged were Kurland, the president of New Castle Partners, another large money manager; Chiesi, a former Bear Stearns executive who now works at New Castle; and Robert Moffatt, an executive at I.B.M.

Goel and Kumar, both 51, supplied information about their portfolio firms or clients to co-conspirators, according to the complaint, who in turn made profitable trades. Kumar was arrested in New York, while Goel appeared briefly before San Jose U.S. Magistrate Judge Patricia Trumbull. Neither Manuel Araujo, his federal public defender during his appearance, nor Goel's wife, who signed papers as part of posting his bail, would comment.

Goel, who federal authorities say lives in Los Altos, was expected to be released after posting $300,000 cash bail and a $100,000 bond.