[JURIST] Former hedge fund trader Danielle Chiesi was sentenced Wednesday to 30 months in prison after pleading guilty [JURIST report] in the US District Court for the Southern District of New York [official website] to three criminal counts of conspiracy to commit securities fraud. Chiesi was accused of communicating non-public information about IBM Corporation, Advanced Microdevices (AMD) and Sun Microsystems (now Sun-Oracle) [corporate websites] in 2008 and 2009 to her superiors at New Castle Funds LLC [fund profile], a Manhattan-based investment advisory company formerly part of Bear Stearns [NYT backgrounder]. Chiesi was arrested in 2009 along with Galleon Group founder Raj Rajaratnam [JURIST news archive] and accused of using the information to reap more than $4 million in illegal profits for New Castle. Last week, Chiesi agreed to pay USD $540,000 to settle a civil charge [JURIST report] with the Securities and Exchange Commission (SEC) [official website].

A federal jury convicted [JURIST report] Rajaratnam in May on all 14 counts of insider trading. New Castle is said to have gained at least $1.7 million from the trades. Chiesi reportedly got the information from former IBM executive Robert Moffat, with whom she was having an affair. Moffat is currently serving six months in prison for insider trading in connection with the Galleon case. Moffat was sentenced [JURIST report] in September and ordered to pay a $50,000 fine for his role in the scheme after he pleaded guilty [JURIST report] the previous March. Former Intel Capital [corporate website] executive Rajiv Goel pleaded guilty [JURIST report] to insider trading charges in connection with the Galleon probe earlier in February 2010. Rajaratnam, Chiesi, Goel and Moffat were arrested in October and charged [complaint, PDF] along with two other individuals and two business entities with insider trading. The complaint alleged that the individuals provided Galleon Group and another hedge fund with material non-public information about several corporations upon which the funds traded, generating $25 million in illicit gain. Rajaratnam and Chiesi initially pleaded not guilty [JURIST report] in December 2009 after being indicted for insider trading.