In July 2008, Danielle Chiesi called her friend and fellow hedge fund manager Raj Rajaratnam. She could barely contain her excitement about a tip she had gotten about Akamai Technologies.
“They’re gonna guide down. I just got a call from my guy,” she said, according to a wiretapped phone conversation played at Mr. Rajaratnam’s 2011 trial. “I played him like a finely tuned piano.”
The tipster inside Akamai was Kiernan Taylor, who had not been charged in the case — until Friday.
Federal securities regulators filed a civil action against Mr. Taylor in Federal District Court in Manhattan, accusing him of trading Akamai stock on secret information and tipping off Ms. Chiesi, a hedge fund manager at New Castle Funds. He agreed to pay more than $ 145,000 to settle the case, and be banned from serving as a public company officer or director.
“Taylor’s willing misuse of information about Akamai’s financial situation otherwise unknown to the rest of the investing public made him just another cog in the sprawling Rajaratnam insider trading machine,” said Sanjay Wadhwa, the head of enforcement in the S.E.C.’s New York office.
Jack Cinquegrana, a lawyer for Mr. Taylor, did not immediately respond to a request for comment.
A jury convicted Mr. Rajaratnam, the head of the Galleon Group hedge fund, after a two-month trial. He paid a $ 93 million fine to the S.E.C. and is serving an 11-year sentence in a federal prison in Massachusetts.
Mr. Taylor spent two decades in the technology industry in a variety of marketing roles. Today, he is self-employed as a consultant, and has a Web site — www.kierantaylor.com — promoting his services. According to the site, Mr. Taylor, a graduate of Penn State University, spent a decade at Akamai. Prior to that, he worked at Nortel Networks.
The secretly recorded calls between Ms. Chiesi and Mr. Taylor were among the more entertaining of the dozens of calls played during Mr. Rajaratnam’s trial. Their conversations were often flirtatious and colorful. On one, on Oct. 10, 2008, he told Ms. Chiesi, ”I have a major present for you.”
Ms. Chiesi: ”Drugs?”
Mr. Taylor: ”No, no, no.”
Ms. Chiesi: ”I hope not.”
Mr. Taylor: ”Information, information.”
Earlier that year, after Mr. Taylor provided his tip about Akamai’s lowered revenue guidance, Mr. Rajaratnam called Ms. Chiesi to show his gratitude, according to another secretly recorded conversation. The two, along with another convicted trader, Steven Fortuna, made about $ 10 million in profits from the tip.
“Hi Dani, I just wanted to thank you,” Mr. Rajaratnam said. “You did it in such a classy way, the way you worked the relationship.”
“It’s a conquest,” Ms. Chiesi said. “It’s mentally fabulous for me.”