Woman pleads guilty in NY hedge fund case

A woman accused of using passion to fuel insider trading pleaded guilty to federal charges Wednesday, tearfully admitting that she shared tips about public companies with others in the hedge fund industry.

The investigation that resulted in Danielle Chiesi's arrest has led to an ever-widening, ongoing federal probe of insider trading.

Chiesi, 45, entered the plea in U.S. District Court in Manhattan to three charges of conspiracy to commit securities fraud. She is to be sentenced May 13 and faces nearly 4 years in prison.

"By crossing the lines on these occasions I ruined a 20-year career," Chiesi said. "I brought disrepute on an honorable profession." She cried as she mentioned the pain her crimes had caused her family. Seated among spectators were her mother, sister and two nieces. "I'm deeply ashamed of what I did."

Chiesi admitted to passing along tips to at least three other people, including hedge fund operator Raj Rajaratnam, who founded the Galleon Group of hedge funds. Rajaratnam has pleaded not guilty to federal charges and remains free on $100-million bail.

Chiesi joins 15 others who have pleaded guilty in the case. Most are cooperating with prosecutors, but Alan Robert Kaufman, Chiesi's lawyer, said she is not.

Last year, before he pleaded guilty and was sentenced to six months in prison, former IBM executive Robert Moffat admitted his romantic feelings for Chiesi clouded his judgment. His lawyers said Moffat was motivated by a desire to impress Chiesi, with whom he had an affair, and said she "played" him by using their intimate relationship to get confidential information.

In her plea Chiesi admitted feeding tips to her boss at New Castle and "others in the hedge fund industry." The charges to which she pleaded guilty accused her of feeding tips to Moffat, Rajaratnam and her boss.- AP