UPDATED 15:43 EST / JANUARY 20 2012

Dell Gets Tangled Up with Insider Trade Charges

Sandeep Goyal, a former Dell employee who later left for a job at Neuberger Berman’s mutual fund business, is in the center of one of the biggest insider trading cases to surfaced recently. The New York Times broke the story, reporting that Goyal has been receiving information  from an unnamed source, presumably a high ranking executive, working at Dell’s Texas headquarters.

The identity of the tipster was not disclosed, but prosecutors did press charges against Goyal and the six others who made an estimated $62 million out of trading Dell’s stock based on the insider’s info. Hedge fund Level Global Investors got away with the biggest cut, about 53 million.

“A co-founder of Level Global, Anthony Chiasson, 38, was among those charged on Wednesday. Also charged were Todd Newman, 47, a former trader at Diamondback; Daniel Kuo, 36, a former portfolio manager at Whittier Trust Company in Pasadena, Calif., and Jon Horvath, 42, an analyst at Sigma Capital, a unit of SAC Capital Advisors, the hedge fund run by the billionaire investor Steven A. Cohen.”

The individuals behind the scheme profited handsomely as well. Horvath, one of quite a few SACcapital traders accused of mischief, received $1 million, while Goyal is known to have received $175,000 in “consulting” fees from Diamondback.

It’s more than probable that there will be an investigation looking into who might have been the one that disclosed the internal decisions, facilitating foul play in the first place. Meanwhile, Dell is facing this commotion in light of the  departure of Phil Soran, the man who co-founded Compellent and leading it through the merger. Compellent plays a key role in the hardware giant’s rapidly growing storage business, which most recently expanded last week with the launch of two new offerings.


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