Ex-AMD chief cited in trading probe

Government prosecutors allege Hector Ruiz, former chief executive officer of Advanced Micro Devices  (AMD), provided information to a defendant in the Galleon insider-trading case, a person familiar with the investigation said.

An unnamed "AMD executive" was cited in a complaint filed against Danielle Chiesi, accused of using nonpublic information to trade stocks.

The person identifying Ruiz as the executive asked to remain anonymous because those details of the case aren't public, Bloomberg News said.

Ruiz stepped down as CEO last year and became chairman of Globalfoundries, which was spun off by AMD, the world's second-largest maker of personal-computer processors.

Chiesi, a former Bear Stearns Asset Management official, was charged by federal prosecutors as part of an insider-trading ring tied to Galleon Group.

Court documents include recorded conversations between Chiesi and the AMD executive, in which he discussed the timing of the spinoff of AMD's manufacturing operations into a joint venture with the government of Abu Dhabi, Bloomberg News reported.

That business became Globalfoundries.

The unnamed executive told Chiesi about the transaction in September 2008, ahead of the announcement of the deal, according to court documents. The executive said there was a 99% chance that the agreement would be disclosed before earnings were announced -- a prediction that came true, prosecutors said.

On Oct. 7, 2008, AMD said it would spin off its manufacturing arm as part of an $8.4 billion investment from the Abu Dhabi government. It reported earnings on Oct. 16.

"You know, we're gonna shock the hell out of everybody,'" the AMD executive told Chiesi, according to a transcript of a Sept. 16, 2008, conversation included in court documents.

Ruiz, 63, hasn't been charged with wrongdoing in the case. He would be the highest-ranking executive tied to the widening investigation of the alleged insider-trading ring, which involves hedge fund Galleon and its founder, Raj Rajaratnam.

Defendants in the case include IBM (IBM) executive Robert Moffat and Rajiv Goel, who helped direct investments at Intel (INTC), AMD's chief rival.

Ruiz declined to comment, said Jon Carvill, a spokesman for Globalfoundries in Sunnyvale, Calif.

The company also declined to comment on the matter, which occurred before Globalfoundries was formed.