$34.6M fine for missing Moody's analyst

Aug. 24, 2011 at 4:29 PM
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NEW YORK, Aug. 24 (UPI) -- A federal judge in New York ordered former Moody's Investors Service analyst Deep Shah, now a fugitive, to pay $34.6 million to settle insider trading charges.

The New York Times said Wednesday Shah is thought to have left the country for Mumbai. Federal District Judge Jed Rakoff agreed to the settlement that includes $24.6 million in fines, $1.76 million in interest and $8.2 million to cover ill-gotten gains, the Times said.

Authorities charged Shah as part of a wide-reaching insider trading investigation that included at its center billionaire hedge fund founder Raj Rajaratnam. Shah -- the only defendant out of 26 charged in the case who has not been convicted in court or admitted guilt -- may be out of reach of U.S. authorities for some time, if not forever, the newspaper said.

Prosecutors said Shah, as an analyst at Moody's, was involved in analyzing debt for companies in advance of a potential merger. In that position, he leaked information in advance of announcements concerning hedge fund Blackstone Group's purchase of Hilton Hotels and Hellman & Friedman's purchase of Kronos, a software company.

Zvi Goffer, a former employee of hedge fund Galleon, founded by Rajaratnam, and his brother Emanuel Goffer, were convicted in pocketing as much as $20 million using information advanced to them by Shah, prosecutors said.

Rajaratnam was convicted in May of insider trading and is to be sentenced Sept. 27, the Times said.

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