Akamai Technologies President and CEO Paul Sagan vowed “swift and appropriate action” if the investigation into alleged insider trading activities involving one of the company’s executives. Speaking to analysts during the company’s third quarter earnings results conference call, Sagan said the company was caught unaware when news reports said an Akamai exec was involved in a multi-million dollar insider trading scandal with Galleon Group and several other traders broke Oct. 16.
“Like many of the other companies associated with this situation, we were not contacted by law enforcement in advance of the announcement,” he said. “We learned about the allegations the same way most of you did -- via news reports on October 16th. This is an ongoing criminal investigation and therefore we will not be able to comment beyond these points.”
Prosecutors say Danielle Chiesi, a trader named as a co-conspirator with billionaire Galleon Group founder Raj Rajaratnam in the $20 million fraud, used an executive at Akamai, described as a family friend, to feed Rajaratnam insider information on Akamai. Authorities say Galleon and Chiesi's company--New Castle Partners--earned a combined $5.9 million using information supplied by the Akamai executive.
Sagan, before taking questions from analysts during the conference call, said: “We take complying with state and federal laws, our insider trading policy, and our code of ethics very seriously. These obligations are not negotiable inside Akamai.
Sagan said Akamai had also begun its own internal investigation, and was cooperating with authorities, adding Akamai has not been notified by any law enforcement entity of any wrongdoing by the company.
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